Ameritech Financial: Student Loan Debt Significantly Impacts Retirement Savings

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Sep 06, 2018, 08:00 ET

ROHNERT PARK, Calif., Sept. 6, 2018 /PRNewswire/ -- College graduates with student loan debt save half of what graduates without student loans set aside for retirement by the age of 30, according to a recent study by the Center for Retirement Research. Though student loan debt does not appear to affect participation rates between these two groups, having debt significantly impacts how much money a young person saves for retirement. This information is striking due to the widespread nature of the student loan crisis. More than 44 million borrowers have accumulated more than $1.5 trillion in student loan debt which means that millions of Americans are saving much less for retirement than they would without debt. Ameritech Financial, a document preparation service company, assists borrowers navigating the complex terrain of applying for federal programs such as income-driven repayment plans (IDRs) that can possibly lower payments and ease the financial strain of student loan debt.

"This is more proof that the burden of student loan debt is weighing down millions of borrowers," said Tom Knickerbocker, executive vice president of Ameritech Financial. "We hope that borrowers gain more financial flexibility by helping them prepare the necessary documents to apply for IDRs that can potentially reduce payments so they can do things like save more for retirement."

The study also found that the benefits of being a college graduate, even when weighed down by significant student loan debt, still outweighed not graduating. Even 30-year-old graduates with $28,000 in debt saved nearly double what their non-graduating peers saved. Interestingly, though, having no debt allowed graduates to have acquired about $18,000 in retirement plan assets by age 30, the amount of debt held by their peers had almost no effect on how much was saved. It didn't matter, for example, if the borrower had $6,000, $16,000 or $28,000 in debt; each of these groups had saved about $9,000 in retirement assets. Researchers speculate that the "simple existence" of student loan debt constricts 401(k) savings.

Researchers have concerns that the large initial advantage of larger incomes that college graduates have traditionally had is offset by the mere presence of student loan debt and that these individuals could lose a lifetime of investment opportunities on the money they are unable to save. Compounding the predicament, since many employers offer a "match" of 401(k) funds, individuals who save less leave "money on the table." Similarly, this money is lost forever, leaving an ever-expanding hole in retirement savings for millions of borrowers.

"Student debt restricts the ability of millions of Americans to build financial security for their retirements," said Knickerbocker. "No one knows, at this point, the future effect this will have on individuals and our economy. We do know we can offer help today to those in need of relief from the heavy burden of student debt by assisting in applying for available federal programs such as IDRs."

About Ameritech Financial

Ameritech Financial is a private company located in Rohnert Park, California. Ameritech Financial has already helped thousands of consumers with financial analysis and student loan document preparation to apply for federal student loan repayment programs offered through the Department of Education.

Each Ameritech Financial telephone representative has received the Certified Student Loan Professional certification through the International Association of Professional Debt Arbitrators (IAPDA).

Ameritech Financial prides itself on its exceptional customer service.

Ameritech Financial Newsroom

Contact

To learn more about Ameritech Financial, please contact:

Ameritech Financial
5789 State Farm Drive #265
Rohnert Park, CA 94928
1-800-792-8621
[email protected]

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SOURCE Ameritech Financial