Higher education employees feel less confident in their overall financial well-being and need increased access to financial education and advice, new research from the TIAA Institute and CUPA-HR finds.
NEW YORK (March 23, 2021) – COVID-19 has substantially affected the higher education workforce's financial well-being as colleges and universities continue to face operational challenges brought on by the pandemic.
According to recent research from the TIAA Institute and the College and University Professional Association of Human Resources (CUPA-HR), 35 percent of full-time higher education employees experienced a decrease in income through furlough or salary reduction since the onset of COVID-19. And 45 percent are very or somewhat concerned about losing their job in the next two years, while 22 percent are less confident in their ability to live comfortably through retirement.
The "Retirement Readiness among the Higher Education Workforce: Impact of COVID-19" and "Financial Wellness Among the Higher Education Workforce: Impact of COVID-19" reports – products of the "2020 Higher Education Financial Wellness Survey" fielded in the fall of 2020 – surveyed full-time higher education employees' attitudes and concerns about their financial well-being and retirement readiness.
"We're seeing plenty of evidence and hearing from employees that the pandemic has negatively impacted personal finances in the higher education workforce," said Paul Yakoboski, TIAA Institute Senior Economist. "We hope schools can use the insights we've gathered to help them enhance the financial wellness of their employees moving forward and also underline the important roles of financial literacy and advice during times of economic stress."
According to the research, a quarter of full-time higher education employees reported their overall financial condition worsened over the last year. Prior to COVID-19, 78 percent of higher education employees had non-retirement savings that could serve as an emergency fund, but more than one-third have used at least some of that savings since the onset of the pandemic.
"In response to the pandemic, many higher education institutions have increased their focus on the health and well-being of their employees," said Melissa Fuesting, CUPA-HR researcher. "Economic stress is an important part of the well-being equation. The data in these reports not only shed light on COVID-19's economic impact on employees, but also offer insights that schools can use as they create and enhance programs to support financial well-being."
Additional key findings from the two studies include:
- Employees are changing their savings and investment strategies. Twenty-five percent of retirement savers increased their savings, while 22 percent decreased their savings since the onset of COVID-19. Forty percent of retirement savers changed their investment strategies; 19 percent decreased their equity exposure while 21 percent increased.
- Just half of retirement savers have received financial advice, but those who have feel more confident. In the last two years, 53 percent received advice on planning and saving for retirement, but only one-third has received advice since the onset of COVID-19. Of those who have received advice, 43 percent of respondents feel very confident in their retirement savings, demonstrating the value of financial advice. By comparison, just 15 percent of those who have not received financial advice feel confident in their retirement savings.
- Debt is keeping higher education employees from addressing other financial priorities. Fifty-five percent of higher education employees carrying debt say those payments prevent them from adequately addressing other financial priorities. Twenty-eight percent of those with debt have taken on new debt, including credit card debt, and 25 percent have missed or been late on debt payments because of financial hardships resulting from COVID-19.
To view the "Retirement Readiness among the Higher Education Workforce: Impact of COVID-19" full report and the full "Financial Wellness Among the Higher Education Workforce: Impact of COVID-19" report, click HERE.
Press Contact: TIAA Media Team, 888-200-4062, media@tiaa.org
About the TIAA Institute
The TIAA Institute helps advance the ways individuals and institutions plan for financial security and organizational effectiveness. The institute conducts in-depth research, provides access to a network of thought leaders, and enables those it serves to anticipate trends, plan future strategies and maximize opportunities for success. For more information about the TIAA Institute, visit www.tiaainstitute.org and follow us on Twitter @TIAAInstitute.
About CUPA-HR
CUPA-HR is higher ed HR. We serve higher education by providing the knowledge, resources, advocacy and connections to achieve organizational and workforce excellence. Serving over 31,000 HR professionals and other campus leaders at more than 2,000 member institutions and organizations, the association offers learning and professional development programs, higher education salary and workforce data, extensive online resources, and just-in-time regulatory and legislative information.
About TIAA
With an award-winning track record for consistent investment performance, TIAA (TIAA.org) is the leading provider of financial services in the academic, research, medical, cultural and government fields. TIAA has $1.3 trillion in assets under management (as of 12/31/2020 ) and offers a wide range of financial solutions, including investing, banking, advice and education, and retirement services.