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College debt domino hurts retirement, entrepreneurs

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A college education can be the key to getting ahead—but the price tag may also be holding student loan borrowers back.

Parents almost universally believe that college is an investment in their child's future, with 89 percent telling lender Sallie Mae they expect their child will benefit from a college education. They're not wrong. Demand for college-educated workers has been on the rise, and the college wage premium—the difference in average salaries of high school and college grads—doubled to 80 percent from 1967 to 2007, according to Georgetown University's Center on Education and the Workforce. A college grad will make an extra $1 million in earnings over a lifetime, on average.

Read MoreLooking for the next crisis? Try student debt

But for the 40 million Americans with student loan debt, the payoff can take longer to arrive, if it does at all. Almost half of former students between 18 and 40 years old surveyed by Citizens Financial Group said they might not have gone to college had they known the impact student loans would have on their life.

"[College] can be good debt, but it isn't necessarily going to be good debt," said Brad Hershbein, an economist with the W.E. Upjohn Institute for Employment Research. Coupled with other economic factors like stagnant wages and rising home prices, debt can have lingering negative effects on borrowers' lives.

By CNBC.com's Kelli B. Grant
Posted 17 June 2015

Editor's note: This is the third in our series, "Debt by Degree." Click to read the first story, "The high cost of student debt," or the second story, "Why is college so expensive?"

Laurie Rubin | Getty Images