Study: Student Loan Forgiveness Programs Could Lessen Job Turnover
By Allie Bidwell, Communications Staff
Despite the popularity of the idea of student loan forgiveness programs, some remain skeptical of their effectiveness, and in some cases, the cost to taxpayers. But a new study focusing on social workers in Massachusetts finds loan forgiveness programs can benefit employers and help reduce the risk of high turnover rates.
The study – conducted by Sunday Fakunmoju and Robert Kersting – surveyed a group of social workers on whether student loan forgiveness would have a factor in preventing turnover. The authors argue that student loan forgiveness programs can be used not only as a mechanism for recruitment, but also for job retention.
In addition to the federal Public Service Loan Forgiveness Program (PSLF), some individual companies have begun offering loan forgiveness as a job perk.
And in lower-paying professions like social work, the potential for loan forgiveness could be particularly influential, the authors write.
“Although social workers are drawn to the profession for altruistic purposes and satisfaction from enhancing the lives of others, they are not immune to financial stress and worry associated with student loan debts and are perhaps motivated by salary and benefits in making job decisions,” the study said.
Overall, the turnover rate over a 10-year period within social work was estimated to be 20 percent annually in the public sector, and 40 percent in the private sector, according to the study. The authors found that those who held a master’s degree, those with a higher level of student loan debt, those with a higher worry about student loan debt, and those with a higher turnover intention were more likely to view student loan forgiveness as likely to prevent social workers from leaving their jobs.
“Evidently, [student loan forgiveness] remains an attractive financial incentive offered by public and private sectors to alleviate the stress associated with repayment obligations, minimize loan repayment default, and stimulate the economy,” the study said. “Given that such programs are yet to be embraced by all sectors and employers, policy initiatives geared toward implementation or retention across states may generate support of perceived relevance to turnover prevention.”
Publication Date: 9/9/2016
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