Skip to main content

You are here

Advertisement

More Than Millennials Crimped by College Debt

A new survey finds that college debt is weighing down retirement prospects — and not just for Millennials.

The Aon Hewitt Financial Mindset Study, which surveyed more than 2,000 U.S. workers, found that 28% of respondents currently have an outstanding student loan, and it’s not just younger workers. According to the report, student loans are held by:

  • 44% — Millennial workers

  • 26% — Generation X workers

  • 13% — Baby Boomers

  • Across all groups, roughly half are paying at least $3,000 per year.


Weight ‘Rates’?

Those obligations may be weighing on participation and savings rates; workers with student loans are participating in employer-provided retirement plans at a lower rate than those without loans (71% versus 77%) — and more than half (51%) of workers with student loans are contributing no more than 5% of pay to their plan (though that also applies to 40% who don’t have those encumbrances).

Perhaps not surprisingly, Aon Hewitt’s data found that workers with student loans were more pessimistic about their financial wellbeing than those without loans. Specifically:

  • 51% say “debt is ruining their quality of life,” compared to just 28% of those without loans

  • 54% spend time at work dealing with financial issues compared to 47%% without student loans

  • 31% are worried about paying their bills, while only 20% of workers without loans share this concern

  • 56% are worried about saving for the future compared to 41% of those without loans

  • 27% said they are “financially comfortable” compared to 43% of their loan-free colleagues

At least one study has found little correlation between college debt and retirement savings. And a recent Wells Fargo survey suggests that, despite college debt, Millennials are saving for retirement, though perhaps at reduced rates.