While the cost of college rises sharply, educators’ salaries are falling further behind those of their college-educated peers. As their careers progress, teachers can expect to continually make 20% less than professions with similar education requirements, according to the Economic Policy Institute (Allegretto and Mishel 2019). Lower salaries coupled with the burden of student loan debt can create serious economic pressures for teachers and impact their personal lives—85% of educators surveyed said student loan debt has prevented them from achieving life goals, such as buying a house or starting a family (Horace Mann 2020). Others have taken on additional jobs to support their families. This economic pressure can also impact educators’ ability to save for retirement, a key objective for future financial wellness.
Combined with other pressures teachers face daily, this economic stress often results in high turnover rates among the teaching force. More than one-third of educators are considering leaving the profession in the next three years because of money; this tracks with the oft-cited benchmark that 44% of teachers leave the education profession within their first five years (Ingersoll et al. 2018).
The need for teachers remains steady, however. In fact, the NCES projects a 5% increase in the number of K-12 teaching positions that need to be filled from 2020 to 2028 (NCES 2018a). But compounding the issue of high teacher attrition is a decline in the number of people considering education as a viable career. The dynamic has created a teacher gap that will continue to grow if nothing changes.
From the 2011–2012 school year to the 2015–2016 school year, the number of bachelor’s degrees in education awarded nationwide declined by 13% (NCES 2018b). During that same period, the number of administrators finding it “very difficult” to fill a teaching vacancy increased from 19.7% to 36.2% (Garcia and Weiss 2019).
Public Service Loan Forgiveness
Congress aimed to address the growing inequity back in 2007, with the establishment of the Public Service Loan Forgiveness (PSLF) Program. The execution of the program has been widely criticized as confusing and contradictory, with fewer than 2% of applications approved (U.S. Department of Education 2020). But the situation is more nuanced than a 98% rejection rate—and that is good news for educators.
A vast majority of PSLF Program rejections could have been prevented with awareness and planning, and most educators are eligible to reapply with updated information. More successful PSLF applications could have a substantial impact on educators’ career choices—88% of educators surveyed said having their student loans forgiven would make them more likely to stay in their chosen profession. In addition, 70% of educators said having lower monthly student loan payments would make them more likely to stay in education (Horace Mann 2020).
The overarching problem with the PSLF Program is that it is confusing and convoluted for individual borrowers to navigate. The good news is that school districts can partner with companies to help their educators apply for student loan forgiveness, evaluate loan repayment options, and identify savings to put toward other life goals. Working with a partner who has expertise in the unique requirements and common pitfalls of the PSLF Program may help many educators successfully reduce the burden of student loan debt.
Student loan debt is just one of the programs districts can leverage to improve retention boost morale, and help their employees feel more confident in their financial future.
Other programs could include:
- Financial success workshops that help educators understand the financial basics of spending, budgeting and saving wisely, including establishing and maintaining good credit, creating a monthly budget, the importance of saving early and the power of compound earnings.
- Retirement workshops that show teachers and school employees how their state retirement benefits and supplemental retirement plans can work together, as well as options for filling the financial gap.
There’s no one-size-fits-all solution. But by keeping financial wellness top-of-mind for employees and implementing a variety of programs, employers can help their employees establish a foundation of sound financial knowledge, improve their financial stability and achieve the long-term financial goals that lead to financial wellness.
REFERENCES
Allegretto, S. and Mishel L. 2019. The Teacher Weekly Wage Penalty Hit 21.4 Percent in 2018, a Record High. Economic Policy Institute Report. April 24.
Garcia, E. and Weiss E. 2019. U.S. Schools Struggle to Hire and Retain Teachers. Economic Policy Institute Report. April 16.
Horace Mann. 2020. Horace Mann Educators Student Loan Debt Study, June 2020.
Ingersoll, RM; Merrill, E; Stuckey, D; and Collins, G. 2018. Seven Trends: The Transformation of the Teaching Force – Updated October 2018. CPRE Research Report.
National Center for Education Statistics. 2018. “Bachelor’s Degrees Conferred by Postsecondary Institutions, by Field of Study.” Digest of Education Statistics.
National Center for Education Statistics. 2018. Number of Teachers in Elementary and Secondary Schools, and Faculty in Degree-Granting Postsecondary Institutions, by Control of Institution: Selected Years, Fall 1970 Through Fall 2028.” Digest of Education Statistics.
National Center for Education Statistics. 2019. “Tuition Costs of Colleges and Universities.” Digest of Education Statistics.
National Education Association. “Average Teacher Salary Down 4.5 Percent, NEA Report Finds.” News Release. April 29, 2019.
U.S. Department of Education Office of Federal Student Aid. 2020. “Public Service Loan Forgiveness Program Data.” May 31.