Student loan burden is rewriting financial priorities, new data shows

Student loan debt continues to reshape how Americans plan, spend, and save, with meaningful consequences for long-term financial outcomes.

Fidelity’s 2026 State of Student Debt study finds that many borrowers are postponing major life decisions while struggling to balance loan repayment with future goals, an issue financial advisors increasingly encounter in client conversations.

The study indicates that 32% of workers repaying student loans have delayed purchasing a home because of their debt. The impact is even more pronounced among younger generations, with 37% of Gen Z and 36% of Millennials reporting that student loans have pushed homeownership out of reach for now.

Beyond delayed milestones, the emotional strain tied to student debt remains significant. Forty-one percent of borrowers say they feel stressed or lose sleep over their finances at least once a week, and two-thirds describe their financial situation as overwhelming. Many characterize money as a source of anxiety rather than stability.

“The burden of student debt takes not only a financial toll on borrowers, but an emotional one as well,” said Jesse Moore, head of student debt at Fidelity Investments. “Across the tens of thousands of US employers Fidelity works with, we’re seeing many borrowers forced to choose between paying down their debt and saving for future milestones. With more than half of borrowers still struggling to pay back their loans, this is a critical time for employers to consider benefit solutions that help their workforce achieve greater financial wellness.”

Fidelity’s data also highlights the long-term cost of carrying student loans into midlife and beyond. Workers over age 50 with student debt have retirement account balances that are roughly 30% lower than peers without loans. Among workers ages 18 to 49, balances are about 20% lower. Borrowers are also less confident about whether they are saving enough for retirement and less certain about how to calculate their savings needs.

Student debt is linked to broader financial fragility as well. Employees with loans are twice as likely to carry medical debt and are nearly 50% more likely to worry about healthcare expenses compared with those who do not have student loans.

From an employer perspective, the research suggests that student debt benefits may play a growing role in workforce strategy. Forty-five percent of borrowers say they would be more likely to stay with an employer that offers student loan repayment assistance, with interest strongest among younger employees.