It’s hard for new college graduates — let alone teenagers making the initial borrowing decisions — to wrap their heads around this possibility when the shortfall is 40 or 50 years away. The whole world is telling them that they should go to college, and they should. But taking on debt to do so leads hundreds of thousands of new graduates each year to forgo saving money for years afterward. The long-term cost ought to be part of the bigger conversation.

Image Credit... Drawing by Robert Neubecker

Here’s how the cost of delaying savings would break down, according to a scenario that Vanguard helped me prepare and compute. Assume that two people graduate from college in the same year and get a job earning the same $45,000 salary, with equal raises over time. (Let’s stop here to allow for the fact that plenty of people take on debt without ever graduating, and plenty more get their degrees but end up in low-paying jobs that don’t require one.)

One individual has a pile of student loan debt and spends the next 10 years single-mindedly paying it down before saving anything for retirement. The other starts saving 4 percent a year (plus an annual 4 percent employer match) and increases it by a percentage point each year until reaching the $17,500 annual pretax maximum that the federal government sets for workplace retirement savings plans. The person with the debt starts saving the same amount at the same rate at age 32, once the student loan balance is zero.

Both people earn 5 percent annual returns on their investments over time. By the time the pair turn 65, the individual with the 10-year head start will have $1,829,571 in a retirement account in today’s dollars. That’s $396,039 more than the $1,433,532 in the account that belongs to the person who spent a decade paying off student loan debt before saving.