The U.S. national debt crossed $40 trillion on Aug. 18, a record high and a milestone that sounds abstract until you convert it into something more familiar: your loan payments.

New economic modeling from The CEO Center, the public policy arm of The Conference Board, puts a dollar figure on what rising federal borrowing actually costs ordinary Americans — a student paying off loans, a family saving for a house, a small business owner expanding, and a retiree counting on Social Security.

The answer, in short: the gap between a responsible deficit path and a reckless one is worth tens of thousands of dollars over a decade, and jumps to six figures in a true fiscal crisis.

The mechanism is simple, even if the debt figures aren’t

Divide $40 trillion by the U.S. population and every American is on the hook for roughly $117,000. But that number doesn’t explain why it matters to someone who will never personally owe the Treasury a cent.

Here’s the actual chain of cause and effect: when the federal government runs a bigger deficit, it sells more bonds to cover the gap. Investors, wary of a less creditworthy borrower, demand higher interest rates on those bonds. Because student loans, mortgages, and small-business loans are all priced off the same benchmark — the 10-year Treasury yield — those higher government borrowing costs flow directly into the interest rate on everyone else’s debt too.

The Conference Board modeled five versions of the next decade: a baseline matching current Congressional Budget Office projections (deficits of 6%–7% of GDP), a “good case” where Washington cuts the deficit to 3% of GDP, a “bad case” where it balloons to 9%, a scenario simulating a one-week government default in 2029, and an extreme shock in which interest rates double to 1980s levels.

Under the current baseline, debt as a share of GDP climbs to 154% by 2036. If lawmakers get serious about cutting deficits, it settles at 126%. More reckless spending, however, puts it at 180%.

The student: an extra $20,000 by graduation

Take a high schooler heading to a four-year university in 2028, borrowing $45,000 for undergrad and another $30,000 for a two-year graduate program in 2032. Federal loan rates are pegged to the 10-year Treasury yield plus a fixed margin — 2.05 percentage points for undergraduate loans, 3.6 points for graduate loans — locked in whenever the loan originates.

Under the baseline scenario, that student repays $103,645 over a standard 10-year term. If Congress gets deficits under control, the bill drops to $102,776, saving roughly $870. If deficits worsen instead, it rises to $104,648. A one-week government default in 2029 would push it to $106,495.

But the real gut punch would be the extreme rate-shock scenario, driving total repayment to $123,736 — nearly $20,000 more than the baseline.

The family of four: waiting to buy a house gets more expensive, not less

A family targeting a $600,000 home with a 20% down payment and a 30-year fixed mortgage faces a similar squeeze — and it compounds the longer they wait. Buying in 2031, the gap between the good-case and bad-case scenarios is about $25,000 on total mortgage payments.

Push the purchase to 2036, and rising deficits widen the gap further: the family pays $24,000 more than baseline in the bad-case scenario, and a staggering $200,000 more — a 19.2% premium — if an extreme rate shock hits. The one-week default scenario alone tacks on $45,000 by 2036.

That’s money competing directly against costs already squeezing this household. For example, center-based childcare now averages $15,570 a year, rising 1.5 times faster than inflation, while long-term care for an aging parent can run anywhere from $75,000 a year for a home health aide to over $128,000 for a private nursing home room.

The small-business owner: financing growth costs more when Washington borrows more

A small-business owner planning two expansion loans — $100,000 in 2031, $150,000 in 2036, each priced at the 10-year Treasury yield plus a 2% bank premium — pays $334,747 in total under the baseline.

Deficit reduction saves about $6,300; a bad-case deficit path costs about $6,500 more. A government default adds $20,000. The extreme rate shock is the worst outcome across any case study in the report: $65,000 more than baseline, a 19.5% increase, at a moment when small-business profitability is already falling and gas costs for small businesses are up 31% year over year.

The retiree: no interest rate, just a shrinking check

The fourth case study works differently because there’s no loan to reprice. Instead, it’s about Social Security’s Trust Fund, which the CBO projects will run out of reserves in 2032. By law, once that happens, benefits automatically drop to whatever payroll tax revenue can cover, unless Congress intervenes. A retiree scheduled to receive $2,466 a month in 2032 would instead get $2,293 — a $173 cut — and by 2036 the shortfall widens to $754 a month.

Congress could avoid the cuts by transferring roughly $2.7 trillion from the general fund between 2032 and 2036. But doing so would add directly to the deficit, pushing the country further toward the “bad case” scenario and, by extension, higher costs for the student, the family, and the small-business owner in the other three case studies. There’s no version of this where the bill simply disappears; it just moves to a different balance sheet.

The bottom line

Three of the four Americans in this analysis pay more in interest, because Washington is borrowing more. The fourth pays through a smaller retirement check, because the money to keep it whole would have to come from more of the same borrowing.

The report’s authors argue that reframing the debt this way — not as a distant trillion-dollar abstraction, but as a line item on a 22-year-old’s student loan bill or a 67-year-old’s Social Security deposit — is what’s been missing from the political conversation.

The CEO Center is pushing Congress to establish a bipartisan fiscal commission, overhaul Social Security financing, modernize Medicare payment models, and reform the federal budget process. Whether lawmakers act may determine which of the report’s five debt scenarios — and which version of these four Americans’ bills — actually plays out.

For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.