Impact of Earned Wage Access Shutdown on Connecticut Families Revealed by New Study

The Fallout of EWA Shutdown in Connecticut

In early January 2024, Connecticut took a notable step by limiting access to Earned Wage Access (EWA) services, which previously provided many working families with immediate access to their earned wages. A recent study conducted by the University of Connecticut sheds light on the significant negative consequences this decision has had on its workers. The research was sponsored by DailyPay and involved a survey of affected individuals conducted from late February to early March 2025.

According to the study's findings, over 67% of respondents indicated that prior to the shutdown, EWA had a favorable impact on their financial well-being. Workers commonly utilized these services for basic necessities. Specifically, 85% used their earned wages for food or groceries, 63% for transportation or gas, and 59% for rent or mortgage payments. A concerning 64% of the respondents were women, many of whom had children at home, and were described as living paycheck-to-paycheck.

The aftermath of the EWA shutdown has seen a stark decline in financial stability for these families. The research indicates that 36% of workers have had to forgo essential items, while 26% resorted to using credit cards, leading to high-interest debt. Additionally, 31% relied on loans from friends and family, with some individuals resorting to desperate measures such as selling personal items (14%), pawning valuables (8%), or obtaining payday loans (6%). These loans come with exorbitant fees — often $10 to $30 in finance charges for every $100 borrowed.

Professor Raissian, who led the study, emphasized the critical need for accessible financial resources as families grapple with the high cost of living and reduced food benefits. The complete closure of the EWA service has forced many families into a corner, requiring them to seek expensive and often exploitative financial alternatives. The study calls attention to measures like Senate Bill 1396, which aims to restore financial access for families while ensuring consumer protection is not compromised.

Phil Goldfeder, CEO of the American Fintech Council, echoed similar sentiments, stating that the shutdown of EWA did not erase financial needs; it merely stripped families of an essential resource that helped them manage their finances with dignity. The reliance on pawn shops and payday loans has risen sharply since the EWA's closure, creating a loop of financial instability.

In summary, the research from the University of Connecticut paints a vivid picture of the struggles faced by Connecticut's working families due to restricted access to earned wages. While the state legislature considers how best to address these concerns, many continue to suffer the repercussions of a decision that has removed a vital lifeline from their reach. Advocates are urging prompt and thoughtful regulation to preserve tools that provide financial flexibility, like EWA, thereby supporting families' ability to thrive.

For further insights, the full study findings can be accessed here.

Survey Methodology: Data was collected through an online survey conducted from February 25, 2025, to March 9, 2025, with responses gathered from leading EWA vendors. Good Policy Partners assisted in communication and advocacy for DailyPay.