Since the restart of student loan repayments in October, the impact of carrying student debt has been made increasingly clear. Studies indicate that student loan debt reduces retirement savings — a finding that makes sense considering nearly four in 10 Americans can’t cover an emergency expense using cash. Student loan payments add a financial burden to an already strapped workforce, providing them with less buffer to devote to short- or long-term savings.
Around one in five U.S. adults have student loan debt, making it an important issue for employers to consider when thinking about their financial benefits packages. And the impact of debt is not equal: Black college graduates owe $7,400 more than white college graduates — a debt gap that triples four years after graduating. Gender disparity in debt grows around 3% each year as well. Our data supports this: in a survey of a small sample of full-time workers earning low and moderate incomes, Commonwealth and the Defined Contribution Institutional Investment Association found the majority of respondents with student debt had over $10,000 in student loans — and respondents who are Black, Latinx or women were significantly more likely to have over $50,000 in debt than white respondents.
