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Source: The College Investor
- Healthcare workers have the highest student debt, with average balances of nearly $75,000 and monthly payments topping $800.
- Generation X and Boomers, particularly those paying off loans for their children, bear the greatest financial burden.
- Student debt is linked to lower retirement contributions, with over 15% of borrowers taking out loans from their 401(k) to manage their debt.
As the student loan repayment period ends, millions of borrowers will now need to resume their payments following the payment and collection pause due to Covid-19. For many, returning to repayment represents a significant financial change, especially for borrowers who have not started making payments since forbearance ended in October 2023.
Fidelity Investments recently analyzed data from its Student Debt Tool and uncovered insights into the industries and generations facing the greatest stress.
Related: Student Loan Debt Statistics 2024
Who is affected by student loan debt?
According to Fidelity Investments' analysis of the Student Debt Tool, healthcare workers are home to the highest levels of student debt. The average debt for healthcare professionals is $74,749, with average monthly payments of $837.
Additionally, 38% of healthcare workers carry student debt, making them particularly vulnerable to the financial pressures of resuming payments. Second is the finance and insurance sector, where 32% of employees are paying off loans, although their average balance is significantly lower at $38,345 and monthly payments average $445.
Other industries such as professional services and retail also report significant student debt burdens, although with lower monthly payments and balances compared to healthcare. In retail, employees report an average debt of $53,013, with monthly payments of about $600.
Effects on generations
Student loan debt isn't just a problem for younger borrowers. In fact, Fidelity data suggests that older generations often bear the greatest financial burden. Baby Boomer users (many who are paying off loans for their children through Parent PLUS loans) report the highest balances of any age group at $54,924, with monthly payments averaging $710.
While Millennials make up the majority of users of Fidelity's Student Debt Tool, with an average monthly payment of $590, overall data shows that Gen Z borrowers have a lower average balance of $29,200, making them less expensive than theirs older colleagues are less burdened with student loan debt.
Retirement planning
One of the key takeaways from Fidelity's analysis is how student debt impacts borrowers' retirement savings. Over 15% of users reported borrowing from their 401(k) plans, and nearly a quarter (24%) contribute less than 5% of their salary to retirement savings. This lack of retirement investing, particularly among younger borrowers, means they are likely to miss out on the long-term benefits of compound interest.
If you want to see more results, check out the Fidelity survey here.
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