The burden of student loan debt is negatively affecting many crucial life decisions of the adults as they struggle to pay off their debts, new research sponsored by Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA) found.
The year-long study conducted by the MIT AgeLab found student loans affecting various aspects of adults’ life including marriage, having children, buying home and saving for retirement and other financial goals.
Student loans majorly affect retirement savings of most American adults. Over 80 percent of respondents reported a negative impact of loans as they plan to save for retirement, while nearly a quarter of adults are not saving at all due to loan repayments.
Many adults reported putting their plans to either getting married or having children on hold due to the loan burden. More than 10 percent of borrowers with an initial loan amount of $24,999 or less report that loans affected the timing of their marriage, compared with 37 percent of those who took out $150,000 or more. The number of borrowers hovers in the range of 19 to 51 percent who reported loans affecting the timing of having children.
As people advance in their careers, the study found student loans playing was a limiting factor in providing confidence in order to meet their financial goals. It is also a source of conflict within families and between couples.
Nearly 36 percent of the borrowers who are contributing to their partner’s education and reported conflict said that their current contribution amount was not clear from the beginning. Many borrowers reported not speaking to their family members about the loans. Some 40 percent of adults with loans for themselves and 36 percent with loans for a child or grandchild report never speaking with their family about their student loans.
“Policymakers, employers, financial services companies and educational institutions all play an important role in identifying and creating solutions,” said Roger W. Ferguson, Jr., president and CEO of TIAA.
“Ensuring people fully understand their options and the impact of any loans they do take, along with innovative approaches to retirement plan design that enable employers to jumpstart people’s savings while they’re paying down their debt, can help address the issue,” Ferguson added.