Report: Student Debt Weighs on Public Sector Workers’ Well-Being

New research finds that student loan debt is having an adverse impact on public sector workers’ overall financial health.

MissionSquare Research Institute recently surveyed more than 2,000 employees (1,001 public sector respondents and 1,035 private sector respondents), in an effort to collect information on how student loans affect financial well-being, retirement readiness and career decisions.

The subsequent report, “How Employer-Provided Resources Can Elevate the Impact of Student Debt Across Sectors” shows what MissionSquare calls “sharp disparities” in all three of those categories, “underscoring the need for employer-driven support initiatives.”

Overall, the report finds that student loan debt is more prevalent among public sector workers, with 52% of public sector respondents saying they are currently carrying student loan debt, compared to 42% of private sector employees saying the same.

In terms of the link between student loan debt and financial health, the results suggest that student loan debt “negatively affects financial well-being across both public and private sectors, particularly for those who still carry balances,” according to MissionSquare researchers.

“Student loan debt continues to be a significant challenge for both public and private sector employees, but the differences in how it impacts their overall financial well-being are notable,” said study co-author Dr. Zhikun Liu, vice president and head of the Institute for MissionSquare, in a statement.

The survey also saw less than one-third of public sector respondents (31%) saying their employer provided resources for debt management, with another 27% indicating they weren’t sure.

Such findings underscore the need for public sector organizations to increase their public service loan forgiveness (PSLF) communication and support strategies to help employees navigate student loan debt-related challenges, according to MissionSquare.

“Comprehensive debt management support, financial literacy education and personalized counseling services are all opportunities where employers can offer support for their workforce, particularly those in the public sector,” said Liu.

“To help improve financial outcomes for all workers, employers and policymakers need to not only offer these resources, but ensure they guide their workforce in understanding them as well.”