Arizona Teachers Should Pay Off Debt BEFORE Retirement

A recent article in the Arizona Republic written by Alexa Chryssovergis caught my eye given that I now work in the world of public education.

Teachers across Arizona work multiple jobs to make ends meet,” gave several anecdotes of teachers who were struggling to survive just on their compensation. The article continued on the theme that Arizona public school teachers are among the lowest paid in the country. The data absolutely supports that.

One recurrent theme was that many teachers have student loans that they are struggling to pay off as part of their monthly budget.

Although the author provided no data as to the average student loan burden, stories I’ve heard (including during legislative testimony) reveal that teachers are carrying this form of debt that poses serious challenges to making ends meet.

However, what the article did not mention is that every public school teacher is forced to “contribute” 11.48% of their gross earnings into the Arizona State Retirement System. The contribution is mandatory but the rate is adjustable.

The bottom line is that teachers are paying student loan companies AND the State of Arizona retirement system before they even pay themselves.

In the wisdom of financial experts like Dave Ramsey, debt should always be paid off BEFORE putting money into a retirement account. And most student loan is manageable and can be paid down in a reasonable amount of time.

What if public school teachers were allowed to suspend their mandatory contributions to the Arizona State Retirement System in order to redirect that income toward paying down their student loan debt? This would lighten their financial burden, get them in the financial black and put them in a position to start building wealth with “gazelle intensity.”

Next year when the Arizona Legislature convenes, I hope to see several lawmakers sponsor a bill that gives teachers and other participants the option to suspend their mandatory contributions into ASRS so they can reduce or eliminate their student loan debt.

We all know that Arizona public school teachers are under compensated. Forcing them to divide their take-home pay between Sallie Mae and ASRS puts teachers further into a difficult financial position that sucks the joy out of doing their job.

Let’s give teachers a break by holding off mandatory contributions to the state until they dig out of student loan debt.


  1. Oh boo hoo hoo. How many of us juggled low paying jobs and paying student loans off. You do what you need to do. If the low paying job was in Corporate America, you contributed to retirement, paid your portion of health insurance, and also saved a buck or two while eating PB&J for lunch. Who would equal out the retirement benefit to the teacher who dawdles paying debt and doesn’t contribute to retirement for 20 years?

  2. Larry Hilliard says

    Well, maybe they shouldn’t have to pay income taxes, social security, or into medicare until after their student debt is paid off. But, is it possible that that would incent them to take out larger student loans and pay them off slower? I think all of this fails to address the real problem. How is it possible that they are coming out college with such a huge debt? Could it be that tuition is way to high? And what would be the reasons behind that? Annual tuition hikes have exceeded inflation rates for what seems like forever – why?

  3. Steve Hadley says

    ASRS is a pretax deduction, so the actual take home would be less than the percentage you’re touting. Also, these contributions may be credited to the employee, but they are used to keep ASRS solvent for its current retiree population. This would force a rate hike for everyone else in the system because the benefits to retirees cannot be reduced in any way.

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