Student Loan Debt Hurts Employer Recruiting, Retention Efforts: Report

Student loan stress affects employees and is a factor in employers’ ability to recruit and retain workers, according to a report published Tuesday by the MissionSquare Research Institute.

“This research is crucial because student debt has a significant impact on both the financial well-being of employees and the ability of employers 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 between the ages of 18 and 49, of whom 1,035 worked in the private sector and 1,001 worked in state and local government between April 30 and May 21. According to the findings, 93% of private sector workers with student loans consider their student loan debt problematic (it was 89% for public sector workers).

Twenty-five percent of private sector workers surveyed said they considered their student loan debt a major factor in considering whether to look for other jobs, and 46 percent said it was a minor factor.

Nationally, student loan debt stands at more than $1.7 trillion, “with people in fields such as nursing, engineering, teaching and other fields often trying to balance career plans and other financial obligations with repayment student loan,” the report said.

Previous research from the Employee Benefit Research Institute revealed that employers in the healthcare and education services sector have the highest percentage of workers with student loan debt at 20 percent.

According to MissionSquare, credit cards are the most common form of personal debt for workers, but student loans cause them more concern. Fifteen percent of survey respondents said they expect it will take more than 20 years to pay off their student loan debt, and about 15 percent of participants with student loan debt said they missed three payments or more times in the last six months.

However, employers can take steps to help workers reduce student debt, MissionSquare said. These steps include providing better information to employees about eligibility for loan forgiveness, providing 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 obtaining necessary licenses, certifications, or credentials while employed. .

Through 2025, employer-sponsored retirement plans can help workers address some of their debt by offering a retirement plan match based on a qualified student loan payment, McKnight’s Business Daily previously reported.