Student debt carriers have lower net worth, higher debt overall, study finds

Student debt impacts household finances far beyond the loans themselves, according to a Pew Research Center report released Wednesday. On average, debt-carrying college-educated households have $8,700 in net worth – one seventh that of their debt-free counterparts.

Paying off student loans? That's going to make building up wealth much, much more difficult , according to a new report released Wednesday.

College-educated household heads under the age of 40 with student debt have a median net worth of $8,700, while the same demographic without student debt has a median net worth of $64,700, according to The Pew Research Center study,  "Young Adults, Student Debt and Economic Well-Being,".

The net worth difference shows that those college-educated with student debt are about 10 years behind in building their nest eggs – meaning they aren't building up as much wealth in the form of stock investments, major purchases, and savings as their student debt-free counterparts, and it's going to take them longer to do so, says Richard Fry, Pew Research Center's chief economist and a lead author on the report. 

"They're in a significant hole," he says.

Pew's study also found that young households with student debt have almost twice as much debt overall as those without it Student debtors carry $137,010 in debt, compared to student debt-free households’ $73,250.

The median outstanding student debt load is $13,000, according to the report, but that makes up just a portion of overall debt loads, along with credit car debt, car loans,and other sources.

Sixty percent of young college-educated households carry credit card debt in addition to student debt, compared to 39 percent of college-educated households without student debt, according to the report. Meanwhile, 43 percent of young college-educated households with outstanding student loans also have vehicle debt.

Such debt loads can have  major economic implications, Mr. Fry notes. "As a result of these high debt levels among young student debtors, it's crippling them to postpone purchases, particularly [of homes]...It's possible that student debt and other debt are holding them back."

Fry said the report isn't suggesting that going to college wasn't worth it. Rather, it shows that this college-educated demographic still has a much higher income than those without a degree, he said, noting that wealth in younger demographics is generally low. But with a college degree, that can change over time.

"Over time, student debtors eventually will begin to accumulate wealth," he says. "They're simply behind."