Asset Building Financial Inclusion Working Paper

Student Debt and Declining Retirement Savings

In this study, the authors use the Survey of Consumer Finances (SCF) to determine whether student loan debt is associated with retirement savings. They find that the median 2009 retirement savings amount for households with no outstanding student loan debt ($55,000) is nearly twice as high as it is for households with outstanding student loan debt ($25,000). Further, multivariate statistics indicate that a household with a four-year college graduate, outstanding student loan debt, and median retirement savings ($80,983) in 2007 incurred a loss of 52% of those retirement savings in 2009 contrasted with a similar household with no outstanding student loan debt. The main policy implication of this study is that outstanding student loan debt may jeopardize retirement savings in the short term. This finding raises questions about the short-term financial effects of over-reliance on student borrowing as a financial aid strategy. However, more research is needed before suggesting policy prescriptions.

Project: College Success


Elliott, W., III, Grinstein-Weiss, M., & Nam, I. (2013). Student debt and declining retirement savings (CSD Working Paper No. 13-34). St. Louis, MO: Washington University, Center for Social Development.