When Jess Sanchez got his master's degree in education, the fifth grade teacher finished with more than $90,000 in student loan debt. His first thought when he saw the bill: "Crap. What did I do?"
The 35-year-old Southern Californian was hoping to save for retirement and help pay for his 10-year-old son's college one day. But Sanchez says half his $50,000 salary will go toward paying off his loans.
"I have no budget for retirement right now. Right now I'm just trying to keep afloat financially, making sure I keep a roof over my son's head," said Sanchez.
According to a new study, the average student loan debt of $35,000 can cost graduates nearly $700,000 in lost retirement savings over a 50-year period.
"Your fate is you're not gonna retire 'til your 75, which is pretty sobering," said Farnoosh Torabi, a personal finance expert with NerdWallet.
Torabi doesn't think paying down college debt and putting money aside for the future should be an either/or situation. She advises millennials to modify or stretch their loans, while cutting back on expenses. Even a small savings now will pay off hugely down the road.
"Albert Einstein called compound interest the 8th wonder of the world. And I think he was right," said Torabi.
If a 23-year-old earning the median salary, who has $35,000 in student debt, saves 6 percent they can expect to retire at 75. But increase that to 10 percent and the retirement age drops by five years.
The average student debt is now $5,500 higher than it was just three years ago. If that rise isn't somehow slowed, the student loan crisis will become a retirement crisis.