Teacher Financial Strains: The Burdens of Student Debt

• In Event: Dismantling Racial Inequities in Teaching: How to Transform Policy Around Teacher Recruitment and Retention

Abstract

Objectives and Perspectives

As many states across the nation continue to grapple with persistent teacher shortages and stagnant teacher compensation, the increasing demands for advanced degrees and certifications alongside the rising cost of higher education collectively operate as financial stressors for the teaching profession (Allegretto, 2022; Steiner & Woo, 2021). With federal student loan repayments set to resume in October 2023 after a three-year payment moratorium, student loan bills may force teachers to stretch their disposable income further, adding additional financial strain. Our analysis examines the landscape and consequences of student loan repayments among the teaching workforce and connects these findings with evidence-based policy levers to reduce teacher financial strains.

Student debt impact teacher supply from both recruitment and retention perspectives. High preparation costs and potential need for loans can operate as deterrents into teaching, as anticipated repayment burdens can be harsh for careers with lower starting salaries as individuals may opt for other, higher-paying careers for the same educational attainment level (Rothstein & Rouse, 2011; Chapman & Lounkaew, 2015). For current teachers, student loan repayments compound on top of other stressors to collectively fuel turnover and attrition while threatening teacher diversity (Author, 2017; Fiddiman et al., 2019).

Data and Methods

This analysis draws upon the 2020-2021 National Teacher and Principal Survey data. The survey asks current public-school teachers a new series of questions about their student loans, including if they ever took out loans, their repayment status, and their stress levels and career choices because of carrying student loan debt. Teacher- and school-level characteristics data allow us to conduct a descriptive analysis of the overall patterns of loan borrowing, repayment, and consequences; its distribution across race and ethnicity, experience, field of certification, and educational attainment; and school-level characteristics such as urbanicity and school poverty.

Findings and Significance

Teachers are significantly more reliant on student loans compared to the average borrower, with about 60% of full-time teachers having ever borrowed to afford their preparation, compared to 36% of all undergraduate students and 42% of all graduate students (Cameron et al., 2023); teachers are also making monthly repayments higher than a typical borrower. Furthermore, we find that these levels of loan borrowing and repayments are further heightened for certain type of teachers, such as Black teachers and special education teachers. For example, Black teachers are more than two times as likely to owe their entire student loan balance compared to white teachers.

The pervasiveness and inequitable distribution of financial strain that student loans impose on the teaching profession thus requires innovative policy transformations to mitigate the consequences of teachers’ financial circumstances. Interrelated policies—such as comprehensive teacher preparation models requiring fewer loans and expanded loan forgiveness programs for teachers—are necessary to recruit a diverse, well-prepared teacher workforce and keep teachers in the classroom.

Authors

• Wesley Wei, Learning Policy Institute

• Emma García, Learning Policy Institute