Debt is weighing on higher-education workers, affecting their day-to-day finances as well as their ability to save for retirement, a new report shows. The report, released Thursday by the College and University Professional Association for Human Resources and the TIAA Institute, paints a worrying picture of employees’ financial health.
Of the 1,210 higher-ed employees surveyed by the organizations in February and March, 80 percent said they held debt from both student loans and other sources. Nearly three-quarters of that population reported that their debt prevented them from adequately addressing other financial priorities — a condition that the report’s authors referred to as being “debt constrained.” The situation is worsened, they note, by the fact that inflation-adjusted salaries are lower now than they were before the pandemic.
That said, the big picture isn’t entirely negative: Large majorities of faculty members, staff members, and administrators said it was somewhat or very easy to make ends meet in a given month, with 84 percent of faculty members reporting they had no trouble. Members of the professional staff, at 68 percent, were the least likely to say it was easy to make ends meet. Employees under age 40 were slightly less likely, at 70 percent, to say the same.
While those findings seem fairly rosy, prospects are grimmer when debt is factored in. The majority of employees who held debt — 70 percent — reported being constrained by it. All told, more than half of employees reported being debt-constrained. That pressure eased somewhat with age; two-thirds of employees under 40 were debt-constrained, compared with 41 percent of those 60 and older.
Student loans were a major factor in debt constraint for the nearly one-quarter of higher-ed employees who carried outstanding student-loan debt. More than 80 percent of those with student loans were debt-constrained, as opposed to two-thirds of those who held other forms of debt that weren’t from student loans.
Debt of all kinds also made a dent in some employees’ ability to make ends meet on a monthly basis. Just under a third of workers who were significantly debt-constrained said it was difficult to get by in a given month, of whom 8 percent said it was very difficult.
While about two-thirds of employees who were significantly debt-constrained reported that they didn’t have trouble making ends meet, financial pressures emerged for them in other ways. The survey’s results suggest significantly debt-constrained employees were skimping on savings. Asked if they had enough in the bank to cover three months of living expenses in an emergency, 21 percent said they definitely did not. That proportion fell to 12 percent among those who had debt but were not constrained by it.
Despite some uncertainty about short-term savings, the overwhelming majority of higher-ed employees said they were saving for retirement. Two-thirds were using their institution’s retirement plan to do so, and another 27 percent reported saving on their own. Debt also affected workers’ confidence that they were saving enough money for retirement. Overall, the report found, about one in five significantly debt-constrained employees who were saving for retirement weren’t confident they were saving enough for retirement, while 19 percent of somewhat constrained and 10 percent of non-constrained savers said the same.
