Stress over student loan debt plagues employees and is a factor in employers’ ability to recruit and keep workers, according to a report published Tuesday by the MissionSquare Research Institute.
“This research is crucial because student debt significantly impacts both employees’ financial well-being and employers’ ability to attract and retain staff, particularly among public employees,” said Zhikun Liu, PhD, CFP, vice president and head of the MissionSquare Research Institute.
MissionSquare surveyed 2,036 people aged 18 to 49, 1,035 of whom worked in the private sector and 1,001 of whom worked in state and local governments, between April 30 and May 21. According to the findings, 93% of private-sector employees with student loans view their student loan debt as problematic (it was 89% for public-sector workers).
Twenty-five percent of the private-sector employees surveyed said they consider their student loan debt to be a major factor in considering whether to seek other employment, and 46% said it was a minor factor.
Nationally, student loan debt amounts to more than $1.7 trillion, “with individuals in fields like nursing, engineering, teaching and other fields often attempting to balance their career plans and other financial obligations with student loan repayment,” the report noted.
Previous research from the Employee Benefit Research Institute revealed that employers in the health services and education sector have the highest percentage of workers with student loan debt, at 20%.
According to MissionSquare, credit cards are the most common form of personal debt for workers, but student loans cause them more worry. Fifteen percent of overall respondents to its survey said they expect it will take more than 20 years to repay their student loan debt, and about 15% of participants with student loan debt said they had missed payments three or more times in the past six months.
Employers can take steps to help workers mitigate student debt, however, MissionSquare said. Those steps include providing employees with better information on loan forgiveness eligibility, offering paid time off for workers to attend educational courses, creating incentives such as matching contributions, and offering employees tuition assistance or the chance to work toward required licenses, certifications or credentials while employed.
Through 2025, employer-sponsored retirement plans are able to help workers resolve some of their debt by offering a retirement plan match based on a qualified student loan payment, the McKnight’s Business Daily previously reported.
