FreeRadius: PEAP Auth only works if…

[vLANity]

• The user password is set to cleartext.  Login failure if set to MD5

• The MAC address is added to the MACs page

It works, which is great.

My question is:
Is the cleartext setting a security concern?

I couldn't figure out which forum to post this in - apologies if this is the wrong one, and pls move to which one is.