The amount of student loan debt has increased significantly in the last decade. A study by Experian found that student loan debt had risen 84 percent from 2008 to 2014. A new report reveals the threat this poses to retirement security for future generations. The Center for Retirement Research (CRR) at Boston College released its report- entitled “Will the Explosion of Student Debt Widen the Retirement Security Gap?”- and finds that the stunning growth in student loan debt has increased the number of Americans at risk for falling behind in retirement.

The CRR researchers used a measure called the National Retirement Risk Index (NRRI) to measure the level of retirement security for different age groups and income levels. The NRRI is based on data from the Federal Reserve. The most recent NRRI estimated that just over half of all Americans are at risk of falling behind their current standard of living in retirement. The CRR researchers took that data and combined it with data on levels of student loan debt. They calculated that with today’s levels of student loan debt, the number of Americans at risk in retirement increases by 4.6 percent. As the authors say:

“The key finding is that – if today’s working-age households had the same level of student debt as those recently leaving college – an additional 4.6 percent of households would be at risk of having inadequate income in retirement.  This change represents a substantial increase in the already alarming rate of households at risk – from 51.6 percent to 56.2 percent.”

How exactly does student loan debt reduce retirement security? For one, it decreases the amount people save in 401(k) accounts and other savings vehicles. If an individual has, say, a $500 per month student loan payment, then they may reduce the amount they would have put in a savings account by $500. Even if they would have only put $300 in a savings account, that is still $3600 per year and that adds up over 30 or 40 years. High student loan debt also delays buying a home and homeownership is key to a secure retirement for many individuals.

What can be done about this? The CRR researchers emphasize that student loan debt must be considered when discussing financial preparedness. We also need to consider how the decline of defined benefit pensions in the private sector has weakened retirement security for workers. With the rise of 401(k)’s, many Americans are already struggling to save for retirement; increasing student loan debt only makes this more challenging. The move away from defined benefit pensions and the increase in student loan debt both represent a shifting of the financial burden onto workers. Furthermore, attempts to gut pensions for nurses, firefighters, and other public employees will only feed into the downward cycle of decreased retirement security that so many Americans are already facing. State legislators, governors, and presidential candidates must offer solutions for the retirement security crisis facing our country- a crisis that is made worse by the rising levels of student loan debt.