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One chart that shows how student debt can devastate retirement savings

Libby Nelson is Vox's policy editor, leading coverage of how government action and inaction shape American life. Libby has more than a decade of policy journalism experience, including at Inside Higher Ed and Politico. She joined Vox in 2014.

Student debt can weigh you down long into adulthood, and might make you less likely to ever be able to retire.

That's according to a new analysis from Demos, a progressive think tank:


This chart shows the clear benefit of getting a college degree. Households with some college but no degree are unlikely to own a home, while homeownership is the norm for households headed by someone who finished college. People who finished college are wealthier on every measure than people who didn't — they've saved more for retirement, and they have more money in the bank.

But particularly when it comes to saving for retirement, the gap between debt-free households and households with debt is immense. Households with student debt have less than half of the retirement assets of households without it.

It's hard to say if this is a purely causal relationship. People without debt are more likely to be from wealthier families. It's also possible that some households without debt once had student loans and have already paid them off. But it's also true that putting $242 each month (the median student loan payment) toward loans makes it harder to save for retirement or put money in the bank.

This matters in part because, as the report from Demos's Mark Huelsman shows, low-income, Hispanic, and African-American students are more likely to borrow than their wealthier, whiter peers. Higher education is still a good route to upward mobility. But just how far students can climb is limited by the debt they have.