In December, 2019 college graduates will start to pay back their student loans, now estimated at $1.6 trillion, according to data from the Federal Reserve.
Millennials predominate among student-loan debtors, but research released Tuesday by Fidelity Investments showed how paying down student debt also affects older people and workers in various industries.
In fact, baby boomers and Gen Xers in the study bear a bigger burden than millennials: average monthly payments of $565 and $490 on average balances of $56,652 and $55,870 with average interest rates of 6.3% and 5.6%.
This compares with millennials’ average payments of $469 a month on a balance of $45,548, with an average interest rate of 5.6%.
Workers in the private health care and social assistance industries pay far more than those in other sectors: $685 a month on average on an average loan balance of $75,336. Here’s how much employees in other sectors pay on average:
- Higher education: $563 on $60,758
- Professional scientific and tech services: $543 on $55,167
- Nonprofit health care: $515 on $56,996
- Information services: $487 on $47,812
- Manufacturing: $465 on $44,062
- Business management: $446 on $45,917
- Real estate: $434 on $42, 418
- Transportation: $413 on $43,964
- Retail trade: $406 on $42,266
Fidelity examined data from some 30,000 users of its Student Debt Tool who represented upward of 4,400 companies as of Sept. 30.
“Our research consistently shows that student debt can have a devastating impact on the financial wellness of many Americans, causing them to delay life events such as buying a home, getting married, having children and saving for retirement,” Asha Srikantiah, head of Fidelity Investments’ student debt program, said in a statement.
According to Fidelity, 19% of Student Debt Tool users reported contributing nothing to their 401(k), and 24% contributed only between 1% and 5% of their salary.
Overall, 13.9% reported having an outstanding loan against their 401(k). Fidelity noted that such loans can have a big negative effect on 401(k) balances, particularly those of younger retirement savers, who have a longer time horizon and as a result, greater potential in their early years to save more.