Student loan debt is playing a significant role in how U.S. workers choose and stay in jobs, particularly in the public sector, according to a new report by MissionSquare Research Institute.
The report, The Ripple Effect of Student Debt: Shaping Careers, Financial Choices, and Well-Being in Public and Private Sectors, found that 56% of public sector workers and 62% of private sector workers say student debt affected their decision to accept a job. It also found that employees with student debt are less likely to remain with their current employer—39% compared to 61% of workers without such debt.
“These findings show how deeply student debt impacts employment decisions and financial behavior across sectors,” said Zhikun Liu, head of MissionSquare Research Institute and co-author of the report. “From job retention to morale and long-term planning, the effects are far-reaching.”
The report, based on survey data from more than 2,000 employees in 2024, also found that workers with student loans were more likely to:
- Report limited career advancement, particularly in the private sector
- Experience lower morale, with public sector workers more affected
- Delay or avoid investing, favoring short-term financial strategies
- View their retirement savings as inadequate
In terms of professional development, the study noted that employees who pursue additional training or credentials are more likely to carry student debt—suggesting a link between ambition and financial strain.
Liu said the findings highlight the need for more targeted financial planning resources and employer support.
“Employees burdened by student debt tend to focus on short-term financial needs and forgo long-term goals like retirement planning,” he said. “Employers who understand this dynamic can better support workforce stability and financial well-being.”
The report uses descriptive and statistical analysis to explore the connection between student debt and financial behavior, with implications for recruitment, retention, and workforce development strategies.
