Outstanding student loan debt is on the rise in the U.S. — in June, it nearly hit $1.6 trillion, a record amount — and more Americans are delaying saving for retirement as a result, FoxBusiness.com reported. A staggering 84 percent of American adults reported that student loans are limiting the amount they’re able to save for retirement, according to new research conducted by the MIT AgeLab and published by the Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA). About three out of four borrowers said they’re putting off maximizing their retirement savings, instead focusing on paying off their student loan debt. More than one quarter — 26 percent — said that they aren’t saving for retirement at all because of student loan debt (the highest non-mortgage debt category in the U.S.). Borrowers, spanning all ages, said they were prioritizing paying off student loans, and will contribute to retirement savings once that’s completed. About 39 percent of those between the ages of 25 and 35 who aren’t saving for retirement cited student loans as the reason. And for the parents and grandparents taking out loans for children and grandchildren, 43 percent said they’ll focus on retirement once the debt is paid. Read more.
In related news, a new report by JPMorgan found that paying off student loans is not just a personal problem, it is often a family issue, FoxBusiness reported. Nearly 19 percent of individuals report receiving help to pay off student loans, showing that it often affects “families’ larger financial lives” as opposed to just the individual borrower’s. The report shows that student loan debt is the fastest growing category of household debt in the country. According to the research, it has more than doubled over the last decade to $1.5 trillion in 2018, trailing behind only mortgage debt. The findings, which used data from more than 4.6 million families who made at least one student loan between October 2012 and July 2018, also note that nearly 45 million borrowers are affected by the "student loan crisis.” Read more.
The issue of student loan debt and bankruptcy is the first problem addressed in the Final Report of the ABI Commission on Consumer Bankruptcy. Click here to download your copy.
