STUDENT LOAN DEBT AMONG EDUCATORS - National Education Association

Some recent graduates quickly find that they are unable to keep up with their monthly payments. Amongthose who entered repayment on federal loans in FY 2017, 9.7 percent had defaulted by 2020, whichmeans that they did not make payments for nine consecutive months (U.S. Department of Education,2020d). Defaulting on a student loan results in borrowers having to pay significant penalty fees, damagestheir credit reports for years, and can even have implications for their employment, including suspensionof driver’s and professional licenses and, for military and federal government positions, denial of securityclearances and promotions (The Pew Charitable Trusts, 2020).While most borrowers will not default on their student loans, carrying a high debt balance has implicationseven for those who are able to manage their monthly payments. A 2020 study conducted by the StudentBorrower Protection Center and the Credit Builders Alliance attempted to quantify the consequences ofstudent borrowing. They concluded that a typical borrower (i.e., one with an average level of auto, mortgage, and credit card debt) with a high level of student debt stress (i.e., a student debt-to-income ratioof 10% or more) would pay nearly 30,000 more on typical financial products, as compared to a similarconsumer borrower with a lower student loan debt-to-income ratio.While it is often challenging to look at how student loan debt affects individuals in specific occupations,2 inthis report, we use data from a 2020 National Education Association (NEA) survey of the nation’s educators3 to provide a snapshot of how student loan debt impacts this workforce segment.About the DataThe findings presented in this document are theresult of a survey fielded by the National EducationAssociation (NEA) in partnership with MSI International. This study was designed to look at theeffects the COVID-19 pandemic had on educators’finances including employment, pay and benefits,and other financial hardships. The survey includedquestions about educators’ student debt includingtheir loan status, repayment type, payment difficulties, debt relief and loan forgiveness, and personalnegative impacts of student loan debt.The survey was fielded over a six-week periodfrom Oct. 30 – Dec. 14, 2020. The respondentscame from a sample of NEA members and twocommercial panels (i.e., pre-recruited individualswho agree to participate in surveys on a varietyof topics) that included both NEA members andnon-members. Between the two sources, therewere 2,498 respondents. About half (1,309) werepre-K–12 certificated staff (teachers and specialized instructional support personnel (SISP), whoare non-teaching certificated staff), followed bypre-K–12 education support professionals (ESPs)(508), higher education faculty (415), and highereducation ESPs (266). All pre-K–12 participantswork in public schools, and those results areweighted against the demographics of pre-K–12public school educators. Higher education respondents work in both public and private institutions,with those data weighted against the demographics of national higher education employees.The results of our analysis are sobering. We found that just under half (45%) of all educators have takenout a student loan at some point to pay for their own education.4 Within the different educator groups,pre-K–12 teachers and SISP were the most likely to have taken out student loans at 53 percent, followed2 Some analyses have parsed student loan data by undergraduate major (see Cominole et al., 2021) or general occupational category (see Board of Governors of the Federal Reserve System, 2020), and a few professional associations haveconducted surveys to provide data for their members (see Nykiel, 2021 for an overview). However, we were unable to identifya comprehensive dataset that allowed for analyzing student loan debt data by current occupation.3 This report uses the term “educators” to refer to all non-administrative staff working in a pre-K–12 school system or highereducation institution. This includes pre-K–12 teachers, higher education faculty, education support professionals (ESPs—classifiedstaff such as paraeducators, transportation workers, and clerical staff), and specialized instructional support personnel (SISP—non-teaching certificated staff such as counselors, social workers, library media specialists, and speech language pathologists).4 These data points reflect information on student loans taken out in the respondent’s name to fund the respondent’s owneducation. Respondents were asked separately about whether they had taken on debt or were helping to pay off loans on behalfof another family member.6

by higher education faculty at 48 percent, and ESPs working at higher education institutions, a group thatincludes graduate teaching and research assistants,5 at 43 percent. Just over a quarter (29%) of ESPsworking in pre-K–12 schools have taken out student loans.6Within the 45 percent of all educators who have taken out a loan, the average total amount of studentloans among educators was 55,800, with 30 percent taking out 65,000 or more (Figure 2).7 More than1 in 10 educators (11%) took out 105,000 or more in student loans. Educators working in higher educationwere more likely to take out higher amounts of debt than their pre-K–12 counterparts (Figure 3).Figure 2. Thirty percent of educators who used student loans took on 65,000 or more in debtto pay for their education. 25K32% 25K to 45K24%15% 45K to 65K 65K 30%Figure 3. Higher education ESPs were more likely to takeout higher total student loan amounts topay for their education than other educator groups. 25K 25K to 45K 45K to 65K 65K Pre-K–12Teachers/SISP31%26%Pre-K–12 ESPs33%25%13%28%Higher Ed Faculty36%21%10%33%Higher Ed ESPs 22%All Educators32%16%20%18%24%15%26%41%30%5 Within our sample of higher education ESPs, 16 percent self-identified as graduate assistants.6 Education Support Professionals work in nine career families that vary in terms of whether a post-baccalaureate degreeis required: clerical services, custodial and maintenance services, food services, health and student services, paraeducators,security services, skilled trades, technical services, and transportation services. In a 2017 survey, the NEA found that 77 percent ofpre-K–12 ESP members and 95 percent of higher education ESP members have at least some postsecondary education.7 Totals in some figures may not add up to 100% due to rounding.Student Loan Debt among Educators: A NATIONAL CRISIS7

Over half (53%) of the 45 percent of educators who have had a student loan at some point still have a balance (Figure 4), which means that a quarter (24%) of all educators are currently saddled with student loandebt. Among those who have not fully paid off their loans, the average current amount of debt is 58,700.Among educators with unpaid loans, 32 percent still owe 65,000 or more (Figure 5), and 14 percent owe 105,000 or more. Nearly half of higher education faculty with unpaid loans reported current balancesof 65,000 or more, with between a quarter and a third of the other educator groups carrying this muchdebt (Figure 6). Interestingly, higher education faculty were the most likely educator group to have fullypaid off their debt and the most likely to have more than 65,000 in current debt, which is unsurprisinggiven that these educators have undertaken more years of education but also earn higher salaries, onaverage, than other educators.It is important to note that the current average amount of debt ( 58,700) is higher than the average totalamount of debt that educators originally took out ( 55,800). This is due to two factors: Those who startedwith lower balances are more likely to pay off their loans quickly, and those with private or unsubsidizedfederal loans may find that they end up owing more than they started with due to compounded orcapitalized interest.Figure 4. With the exception of higher education faculty, a majority of educators across categories arestill have unpaid loans.Pre-K–12Teachers/SISP53%Pre-K–12 ESPs47%38%62%Higher Ed Faculty46%Higher Ed ESPs54%57%All Educators43%53%Unpaid loans47%Paid loansFigure 5. Among educators with current student loan debt, 32% still owe 65,000 or more. 25K33% 25K to 45K 45K to 65K 65K 822%12%32%

Figure 6. Among educators who still have student loan debt, higher education faculty are morelikely than other educator groups to have high current loan balances. 25K 25K to 45KPre-K–12Teachers/SISP37%21%13%28%Pre-K–12 ESPs38%18%12%32%24%7%Higher Ed Faculty 19%Higher Ed ESPsAll Educators25%33%27%22% 45K to 65K20%12% 65K 48%26%32%In the remainder of this report, we take a closer look at how student loan debt has affected three groups:younger educators, more experienced and older educators, and educators of color. Throughout thesesections, we discuss the economic dynamics that led the nation to this point. In the segment on youngereducators, we look at the decades-long public divestment in higher education that resulted in significant cost-shifting from institutions to students and families. For more experienced and older educators,stagnant wages and increasing wage gaps—compared to other professions—have made it increasinglychallenging to pay down debts. And, most importantly, structural and institutional racism is embeddedthroughout not only the student loan system but the nation’s entire economic structure.We conclude with a section that illustrates the financial precariousness and stress that plagues educatorswith student loan debt. The COVID-19 pandemic provided a unique opportunity to explore the economiceffects of a significant national economic shock. Using reports of how educators’ financial circumstanceschanged between the pre-pandemic and pandemic periods, we show that those with student loan debtwere less able to weather this economic upheaval despite the federal government providing emergencyrelief to those with federal student loans.II. Student Loan Debt among Young EducatorsAs shown above, student loan debt has exploded in recent years, with students taking out ever-largerloans to fund their undergraduate and graduate studies. This is not due to today’s students being lessfinancially responsible than previous generations. Rather, steady declines in higher education fundinghave resulted in students and families bearing a greater proportion of educational costs. Between 2008and 2018, inflation-adjusted state funding for higher education declined in 41 states, with states spending,on average, 13 percent less per student at the end of that decade than they did at the start (Mitchell et al.,2019). In six states—Alabama, Arizona, Louisiana, Mississippi, Oklahoma, and Pennsylvania—per-studentfunding for higher education fell by more than 30 percent during this time period.Higher education institutions have adjusted to these funding cuts by applying two strategies. One tacticinvolves reducing what they offer students. For example, prior to the COVID-19 pandemic, many collegesand universities were cutting academic and student support programs, instituting hiring freezes, putting off facility maintenance, and engaging in a variety of other cost-saving tactics; such measures havebecome even more common—even drastic—in the wake of the pandemic’s widespread economic andsocietal impacts (Gardner, 2021; Yuen, 2020).Student Loan Debt among Educators: A NATIONAL CRISIS9

The other way that colleges and universities have made up for lost revenue is by increasing tuition (Mitchell et al., 2019). We noted at the start of this report that the average total cost (tuition, fees, room, andboard) of one year at a public8 institution increased 31 percent from 2007-08 to 2017-18 (U.S. Departmentof Education, 2019). The Center for Budget and Policy Priorities further spells out that in seven states—Alabama, Arizona, California, Colorado, Florida, Georgia, and Hawaii—published tuition increased by morethan 60 percent in this time period, while in Louisiana tuition more than doubled (Mitchell et al., 2019).As a result of reductions in government funding and increases in tuition, the student share of highereducation revenue (i.e., the proportion of the total revenue coming from tuition) climbed from 29.1 percentin 2001 to a high of 47.5 percent in 2013, followed by a slight decline to 44 percent in 2020 (State HigherEducation Executive Officers Association, 2021). In half of the states, tuition and fees now provide morethan half of all higher education revenue, and in seven states, the student share for four-year institutionsis over 75 percent.In line with this cost-shifting from government funds to individual students, an analysis by the National College Attainment Network (NCAN) showed that public institutions are increasingly out of reach for manystudents. The percent of public, four-year institutions that NCAN classified as affordable9 declined from31 percent in 2014-15 to 23 percent in 2018-19. While community colleges remain more accessible, therehas been a decline in affordability for them as well, from 49 percent in 2014-15 to 41 percent in 2018-19(NCAN, 2021).Thus, postsecondary students are reliant on ever-higher amounts of financial aid to pay for their schooling. Fortunately, the average loan per undergraduate student, after controlling for inflation, has leveledoff since its high during the Great Recession, and the average grant amount increased (U.S. Departmentof Education, 2021b). Yet most of the increase in grants was due to larger institutional grants from private,non-profit institutions, which only about 20 percent of students attend. The key federal grant program—the Pell Grant—has not kept up with rising costs and now covers less than a third of tuition, fees, and roomand board at a public, four-year institution, a decline in value of 11 percent from 20 years ago (Mitchell etal., 2019; National Association of Student Financial Aid Administrators, 2019). And for those who pursuegraduate degrees, the average loan per graduate student continued to increase after the Great Recessioneven after controlling for inflation (U.S. Department of Education, 2020c).How have these trends affected our nation’s educators? Not surprisingly, younger educators are far morelikely to have taken out student loans than older educators. Two-thirds (65%) of educators ages 18–3510and over half of those 36–45 have taken out a student loan to finance their own education compared to27 percent of educators ages 61 and up (Figure 7).8 We focus on public higher education institutions as the majority of students (74%) attend these colleges and universitiesrather than non-profit or for-profit, private institutions (U.S. Department of Education, 2021b).9 NCAN categorizes an institution as affordable if the total price for an in-state student plus 300 for emergency expensesdoes not exceed the combined total of that institution’s average federal, state, and institutional grant award, average federalloan disbursement, the expected family contribution of the average Pell Grant recipient, an average Federal Work Study award,and the contribution of summer wages.10 While a majority of educators are at least 21 years old, a small proportion is younger, particularly within ESP career families.We thus use 18–35 as the youngest age category in this report.10

Figure 7. Younger educators are more likely than older educators to have taken out student loans tohelp pay for their education.18-3565%36-4554%46-6039%61 27%Younger educators are also much more likely than their older colleagues to have taken on high levels ofstudent loan debt. Among the oldest educators—those who are age 61 and up—a majority, 61 percent,of those who used student loans took out less than 25,000 (Figure 8). In contrast, nearly half (42%) ofeducators ages 18-35 took out at least 65,000 in student loans. As we have discussed above, thesedifferences are not simply due to inflation-driven increases in the cost of postsecondary education.Figure 8. Younger educators are the most likely to have taken out large student loans. 25K 25K to 45K 45K to 65K18-35 17%25%16%36-4524%19%25%13%46-6061 24%38%61%20%5% 65K 42%33%26%13%Student Loan Debt among Educators: A NATIONAL CRISIS11

NEA Member: My student loans are the size of a mortgage.Maggie GannonSecond-grade teacher, VirginiaI try not to think about it! The total amount of debt for both [undergrad and graduate degrees from in-state, public colleges] is almost 200,000. It’s really awful. Really awful. I re-apply every year forPublic Service Loan Forgiveness, but the website is confusing and Idon’t know how much is eligible for forgiveness. If I could get it, I’ddefinitely be a lot less stressed—and it would take about 400 offmy monthly bills. Honestly, I want to buy a house, but my studentloans are the size of a mortgage. My car is a 2014 Honda and myplan is for it to run forever. People ask me: If I had to do it overagain, would I do the same thing? Teaching is my passion! I love it.I can’t imagine myself doing anything else. Sometimes, when it’scrazy stressful, the debt is overwhelming but I really don’t thinkthere is anything else I was meant to be doing.Along with higher levels of debt, today’s newest educators are often faced with low starting salaries.In 2019-20, the average starting salary was 41,163, and only 13 percent of districts offered a salary of 50,000 or more. Nearly half (48%) of districts—employing almost 30 percent of teachers—offered astarting salary below 40,000 (National Education Association, 2021a).It is therefore unsurprising that our survey found that only 18 percent of the youngest educators and 39percent of those ages 36–45 have fully paid off their student loan debt. Given this and the high debtloads they had to begin with, it is predictable that younger educators were more likely than their oldercolleagues to report that student loans impacted some major life decisions. More than a third of educators 45 and younger say that their loans affected their ability to buy a home compared to about a quarterof older educators (Figure 9). Similar age effects were also found in terms of educators’ decisions aboutreturning to school, starting a family, and getting married.Figure 9. Younger educators with unpaid loans are more likely than their older colleagues to report thatpaying off student loan debt impacted major life decisions.Buying a ning to school28%Starting a family28%Getting married 14%1218%10%61 27%

The financial struggle of younger educators does little to alleviate the pre-K–12 teacher shortage in theUnited States. The number of undergraduates enrolling in teacher education programs declined by morethan a third between 2010 and 2017, while teacher preparation program completions decreased by 28percent in the same time period (Partelow, 2019). It is likely that some of this troubling trend is due to student loan debt: Research shows that a college student’s debt burdens influence their decision to pursuecertain careers; each additional 10,000 in student debt reduces the likelihood of choosing a career ineducation by nearly 6 percentage points (Rothstein and Rouse, 2011).Younger educators have been hit harder by student loan debt than previous generations due to dynamicsbeyond their control, which has implications for recruiting and retaining new teachers and other educators. However, they are not the only educator demographic bearing the financial realities of our nation’shigher education system. In the next section, we explore how student loan debt continues to affect educators throughout their careers.III. Student Loan Debt among More Experienced and Older EducatorsHigh student loan debt can burden educators for the duration of their careers. Pre-K–12 average teachersalaries have been stagnant since the Great Recession, with only a 0.9-percent increase since 2012 afteradjusting for inflation (National Education Association, 2021b). While the national average teacher salarywas 64,133 in the 2019-20 school year, that number is driven by higher average salaries in populousstates in the Northeast and on the West Coast. In three states—Florida, Mississippi, and South Dakota—the average teacher salary is less than 50,000, and it is between 50,000 and 55,000 in 18 states.Pre-K–12 teachers also experience less salary growth over the course of their careers than many occupations, with mid- and late-career teachers in some states earning salaries that are low enough to qualify formultiple government-support programs (Boser and Straus, 20

federal student loan debt, up from 28.3 million people holding 516 billion in debt in 2007 (U.S. Depart-ment of Education, 2021c). In other words, the amount of outstanding federal student loan debt has . tors3 to provide a snapshot of how student loan debt impacts this workforce segment. About the Data The findings presented in this .