Student loan debt is often associated with younger generations. According to an EBRI study published in January 2021, 66.7% of families with student loan debt in 2019 had family heads younger than 45, and 40.5% had heads younger than 35.
But, as Ms. Hunter Peterson said, "people of all ages, all generations, all demographics, struggle with student debt." A Fidelity Investments case study from June found that while millennials are the most likely generation to have student debt, baby boomers pay the most amount of student loan debt, on average.
"Even though people have student loans, that hasn't totally prevented them from participating in retirement plan benefits, because in many cases, they are — particularly those that finish their education — in higher-paying jobs," EBRI's Mr. Copeland said.
Mr. Copeland's research report from December shows millennials had higher median balances in their defined contribution plans than Generation X did, when comparing balances from when both generations were ages 25-36. He said this could be because millennials had immediate access to defined contribution plans, whereas Generation X may have only participated in defined benefit plans when they first entered the workforce.
Regardless of age, Mr. Copeland said the new student loan forgiveness plan will likely be most impactful for those who never completed their bachelor's degree but are still paying off student loans.
"That's the one group that we can really change in the loan forgiveness issue is those that didn't really get the full benefit of their education debt that they took on," he said. "And now that they don't have to pay it, then they could certainly be the ones that would have the ability to really change what their retirement savings is."
The EBRI study from January 2021 found that those with student loans who did not finish their degree are less likely to participate in a defined contribution plan, and when they do, their plan balance is smaller than those with loans who did complete their degree.