Employers are starting student loan benefit programs or just “sticking their toes in" to explore ways to help their workers pay off their college debts, according to Lori Lucas, president and CEO of the Employee Benefit Research Institute (EBRI).

Giving employees assistance in tackling a problem that is almost overwhelming to some recent college graduates who are trying to start a work life is gaining traction with employers, Lucas said during a webinar on Wednesday.

EBRI canvassed 250 employers with at least 500 employees for the Employer Financial Well Being Survey to find out if employers are concerned about the problem and if they are initiating programs to tackle it.

One-third of the employers surveyed have a program to help employees pay off student loans or are considering implementing one in the near future, the survey said.

Student loan debt has reached $1.5 trillion in the United States—a debt load that is getting in the way of employees’ efforts to reach other goals, according to the survey. Six out of 10 adults with student loan debt would consider switching employers to receive help in paying off the debt. Forty-two percent of adults with student loan debt are not saving for retirement, the survey said.

To show what some firms are doing, EBRI highlighted the student debt program at Abbott, a health-care company headquartered near Chicago that has 103,000 employees worldwide. One year ago, Abbott launched the Freedom 2 Save benefit, a program to help employees pay off student loans at the same time they start saving for retirement.

Abbott had a 401(k) program in place with a match of up to 5 percent. The firm added a component that allows employees to use part of their salaries to pay off their student loans instead of contributing to the 401(k) savings plan. In return, the employee is given the same match of up to 5 percent, but the matching money goes into the retirement savings account.

In this way, employees are able to start saving for retirement at the same time they are paying off the student loan, said Mary Moreland, divisional vice president of compensation and benefits at Abbott.

In addition to helping employees, Abbott initiated the program as a recruitment tool, Moreland said. Abbott does not have a retention problem with employees, but a program like Freedom 2 Save could also help firms retain good employees, she said.

Being able to pay off debt, including student loans, reduces stress and improves employees’ well being, Moreland said.

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