How Student Debt Affects Health, Housing, and Pensions

Student loan debt continues to impact Americans’ financial lives, often forcing difficult tradeoffs between paying off student loans and investing in the future. A new survey from Fidelity Investments finds that borrowers are delaying homeownership, struggling with stress and falling behind on retirement savings – patterns that persist across all age groups and income levels.

The 2026 State of student debt studybased on a national survey of American adults currently repaying student loans, paints a picture of increasing financial pressure. Nearly a third of borrowers say their student debt has caused them to delay buying a home, while many report that they often worry and feel uncertain about their long-term financial security.

“The burden of student debt not only takes a financial toll on borrowers, but also an emotional toll.” says Jesse Moore, head of student debt at Fidelity Investments. Within Fidelity’s customer base, many employees feel forced to choose between reducing debt and saving for future goals.

Home ownership and other milestones postponed

According to the survey, 32% of borrowers say student loans have delayed their ability to purchase a home. That figure rises to 37% among Gen Z borrowers and 36% among millennials, underscoring how student loan debt weighs heaviest on workers earlier in their careers.

The findings are consistent with broader concerns about affordability in the housing market, but the data suggests that student loans remain a clear barrier even as borrowers age. Fidelity’s research shows that more than half of student loan borrowers nationwide are still struggling with repayment, limiting their ability to build savings for down payments or qualify for mortgages.

For many households, this delay extends beyond housing. Fidelity’s analysis shows that borrowers often postpone other long-term goals, including retirement savings, to manage monthly loan payments.

Financial anxiety remains widespread

The research also highlights the emotional strain associated with student debt. Forty-one percent of borrowers report worrying about their finances or losing sleep at least weekly. When asked to describe their relationship with money, 34% chose the word “stressful,” while 67% said they felt overwhelmed managing their personal finances.

These feelings persist even among borrowers who are actively paying student loans. Fidelity’s research shows that uncertainty (about repayment terms, interest costs and competing financial priorities) continues to shape the way borrowers view their overall financial health.

These stress indicators matter, researchers note, because chronic financial anxiety can affect decision-making, workplace productivity and long-term planning.

Lower pension balances among borrowers

Fidelity’s internal participant data indicates a measurable link between student debt and reduced willingness to retire. Among employees aged 50 and over, those with a student loan do average pension balances that are 30% lower than those of peers without student debt. For employees aged 18 to 49, balances are approximately 20% lower.

Borrowers also report lower confidence in their retirement preparation and greater uncertainty about how much to save. The data reflects a common pattern: Workers often reduce or pause retirement contributions while prioritizing student loan payments, especially early in their careers.

Over time, these missed contributions and lost investment growth can have lasting consequences, especially for borrowers who spend a decade or more repaying their loans.

Employer benefits show measurable impact

While the research highlights ongoing challenges, Fidelity’s data also suggests that employer-sponsored student debt benefits can change outcomes for both workers and companies.

Nearly 45% of borrowers said they would be more likely to stay with their employer if student loan repayment assistance was offered, including 52% of Gen Z borrowers and 47% of Millennials. Employers who use Fidelity’s Student Debt Direct program – where companies make payments directly to lenders – have seen a 26% lower turnover rate among participating employees. Collectively, these employers have helped employees pay off more than $700 million in student loan principal and interest, shortening repayment terms by three to four years.

Fidelity’s student debt retirement program takes a different approach, allowing employees to earn employer retirement contributions while paying student loans. Since its launch in early 2024, more than 200 companies have taken advantage of the benefit, covering nearly two million eligible employees. Participants received an average of $1,900 per year in employer contributions tied to their student loan payments.

Over a typical ten-year repayment period, Fidelity estimates that these annual contributions could amount to nearly $200,000 by retirement age, assuming long-term investment growth.

“Student loan benefits can be especially powerful for workers early in their careersMoore said. ‘When young workers can pay off their loans while getting a head start on savings, it builds confidence and gives them a solid foundation for long-term financial well-being.”

What student loan borrowers can take away

The findings underscore how student debt continues to shape financial behavior well into adulthood.

For borrowers, the data highlights the importance of understanding how loan repayment choices relate to savings, housing decisions and health care costs. For employers, the research points to the benefits of student loans as a tool that can address employee stress while improving retention and long-term financial outcomes.

As student loan repayment remains a defining issue for millions of households, Fidelity’s research suggests that solutions that combine debt reduction with long-term savings can alleviate some of the pressure – especially for workers early in their financial lives.

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