Deciding whether or not to take out student loans is life-altering, and irreversible. On the one hand, all that government cash can be a ticket to another social class and a better life. Conversely, accepting it could theoretically make the difference between your one day owning a house and forever remaining stuck in the rental market. It can also determine whether you have enough net worth to start a family. If you're paying it back, you might be skipping out on saving for the tail-end of your life—the part that comes after you retire from the white-collar job you took all those classes to (hopefully) get in the first place. Basically, the very adult decision to get an education and launch a career can lead to the delay of many traditional milestones of adulthood. It's a double-edged sword, no matter which way you slice it.

But exactly to what degree does student debt affect millennials' ability to obtain and grow wealth? MagnifyMoney, an independent service that compares financial products and is affiliated with the loan marketplace LendingTree, recently analyzed 2016 data from the Federal Reserve and estimated the average millennial with student debt had 75 percent less net worth than their debt-free peers. Though many of the stats they calculated might have been skewed by extremes—think people with debt loads of $200,000 and trust-fund kids worth seven figures—they were able to reach some pretty startling conclusions. For instance, the median net bank account balance (checking and savings) of all grads under 35 who had loans, they found, was $5,500, while it was some $10,180 for those who didn't.

To get a better sense of how student-loan debt snowballs and what it means for your future, I called up Brian Karimzad, MagnifyMoney's co-founder and head of research.

VICE: Basically, what this shows is that student-loan debt has a snowball effect, right?

Brian Karimzad: This is the first time we've seen an update in this federal data since the financial crisis, and we wanted to get a sense of how net worth has changed for people with student loans and where they stand, and how this has evolved from a simmering problem to a crisis level for many graduates—particularly people who graduated into the recession, which was ten years ago. And what we saw was startling in terms of the absolute gap in net worth. But one thing that was kind of interesting for us is the difference in net worth—and this is constant dollars—for people [who are under 35] with and without student-loan debt, is that if you look back in 2004, it was around $70,000. Now it's around $80,000. I would have expected it to maybe have doubled in that time, so it wasn't as striking as I thought, which maybe a function of the fact that the backgrounds of the people taking on student-loan debt were probably similar-enough situations. That said, it's clearly going up.

So what's the most meaningful difference between those with loans and without?

The one that's really most costly is when you look at the retirement savings. On that side, the average grad under 35 with debt has around $21,000 in retirement savings. Someone who doesn't have student loans has an average of almost $40,000. And retirement savings are a bit less skewed by the trust-fund effect, because you typically have to contribute to those while you're working. They're tax-advantaged, so trust-fund money wouldn't be counted in that number. You get socked twice by not being able to contribute to your retirement account when you're young, one, because you're just not saving at all, and two, because you're missing out on a tax benefit. When you contribute to your 401(k), that money is not taxed until you go and withdraw it for retirement, so you're able to compound and grow that money the full amount as opposed to the amount after taxes.

Do we have any data to indicate how student-loan debt affects family planning and home buying, or otherwise delays the growing-up process?

People with student loans actually have about the same home-ownership rate as people without them. At least so far the data is showing, people are not particularly delaying home ownership because of student loans. So 34 percent of people with the loans are homeowners, and 36 percent without them are homeowners. The difference is in the size and value of the house they buy. The median for people with loans is $157,000 and for those without them it's $165,000. So about 5 percent less, which is interesting. And it also basically comes down to people with student loans are putting less money down.

According to your report, a lot of people who have loans rely on credit-card debt to keep their heads above water. Is there a better way for them to manage expenses?

If you have a situation where you need to use credit-card debt to finance your month-to-month, then you shouldn't be putting money into a retirement account. Because the rates on that are 18 percent or higher. Credit card debt has a high rate because it's meant to be short-term. It's designed to be something that you don't take on for more than a year, and ideally not more than a few months when you have an emergency that arises. If you find yourself in that situation, where you've taken on debt and it's been more than three months, you need to take a hard look at extending the term of the payment, but get it off the infinite revolving [cycle of debt].

That's when you want to take a look at things that are fixed-term and designed for longer-term borrowing and get yourself on a set repayment plan with a better rate. You should still aggressively pay that down as fast as you can. [With] those, you're looking at rates in the 5 to 10 percent or more range—which is higher than what you're probably paying on your student loans. And certainly higher than what you would earn by keeping your money in a lot of savings vehicles.

Should the government be worried about this?

Most defaults on student-loan debt have been happening on smaller loans. These tend to be people who didn't complete school and didn't get the benefits of the degree. So it's kind of like throwing away the keys to a house you just don't want to live in anymore. If you look at folks who have big balances, they may be taking longer to form families, but they may also be earning more than they would otherwise.

Many people are relying on student-loan forgiveness to make up some part of this gap, which, if the public service loan forgiveness rollout is any indication, might be naive.

Public service one is certainly getting a lot of attention now, though it's fairly small numbers. If that one isn't resolved, I'm not sure it's going to have a large impact on the economy. The one where the numbers are very high is people who have gone into income-based repayment (IBR). We're many years away from people qualifying for forgiveness on those. Now that cohort is one that could have a substantial effect, and that will be a political battle when we reach the point of forgiveness. But it's one of those things that's so far out it's impossible to gauge the consequences. But for now, what it's doing is inflating the balances you see out there.

When you're on one of these repayment plans, the interest is accruing on top of it, and the total amount owed is going up even as you're making your monthly payments. So that looks scary on a credit report, it looks scary on these total liabilities. But if the plan works as it is, then a large portion of that outstanding student-loan debt won't be a burden on borrowers. To the extent that your balance goes up during this repayment period, then at the end of 20 years, in theory, as a borrower, the way it's structured now, the only liability you may have is the tax liability.

What might the ramifications to the economy be if all those people don't get their loans wiped and end up with $200,000 or $300,000 worth of debt in 20 years?

If it isn't honored, you will see a lot of conflict. But the thing about student loans is that unlike Social Security and Medicare, it's not quite the same situation where the ballooning balance is covering an existing benefit. So if the government had to write off their main liability on something like these loans, the principals are in large part repaid. And so in terms of a cash basis, it's not much of a loss. It's how much interest is the government willing to forgo. And that's what it's going to boil down to. There are people who believe the government deserves every penny of interest. But I think the way this one is playing out is as a slow-moving accident.

This interview has been lightly edited and condensed for clarity. Sign up for our newsletter to get the best of VICE delivered to your inbox daily.

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