Student Loan Debt Today May Prevent Many Borrowers’ Plans for Retirement
Student loan debt is stressing out a lot of borrowers today; in fact, the crisis is so overwhelming around the US that all too many consumers are having to hold off on many of the most exciting and rewarding parts of life such as getting married, having kids, starting business—and even buying homes. For those who do have spouses and families, many marriages are stressed, and student loan burdens are even cited as the reason for a significant percentage of marriages ending in divorce. The bottom line is that with an average of over $350 a month expected in student loan payments from borrowers in the 20- to 30-year-old range, life can get very difficult.
Recent news highlights a study showing that the plight of student loans may affect borrowers all the way into retirement too. With so many borrowers (over 44 million of them) pouring a significant amount of their income into paying back their loans, savings becomes an obvious challenge; in fact, just making enough to pay the essential bills could be difficult too as many borrowers fall into delinquencies and even total student loan default.
“While student loans appear to have no effect on participation and no significant effect on the asset accumulation of nongraduates, graduates with student loans accumulate 50 percent less retirement wealth by age 30,” states the research. “Interestingly, graduates’ retirement plan assets are not sensitive to the size of their student loans, suggesting that the simple presence of a loan looms large in their financial decision-making. Future research should examine whether this counterintuitive result holds when other data sources are used.”
And while student loan borrowers may not be saving as much for retirement, those with the income to do it are spending on the essentials such as housing and cars. Analysts like David Nanigian, the director of the personal financial planning program at the Mihaylo College of Business and Economics at California State University, have solid advice for student loan borrowers of all ages:
“To meet the objective of household wealth maximization, it is often best for individuals to focus solely on paying off student loans before they begin to save for retirement.”
Have you experienced problems with your loan service provider, or are you in danger of defaulting on your student loan? Contact Fitzgerald & Campbell, APLC now so one of our experienced student loan debt attorneys can review your case and discuss all the available options with you.
Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, bankruptcy and other debt management processes. We are here to help! Call us today for a free consultation at (855) 709-5788 or email us at firstname.lastname@example.org.
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