Housing Expert Forum: The Impact of Student Loan Debt on the Housing Market
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QUESTION: Americans now hold close to $1.2 trillion in outstanding student loan debt making it the second largest form of consumer debt after home mortgages. What are the implications for housing markets, household formation, and economic mobility for the next generation? Are there creative approaches to reduce the burden?
All-of-the-Above Approach Needed to Counter Impact of Student Debt
By Kent Watkins
Although many who took out student debt were the normal new so-called Echo generation entering that phase of their life, others, who had stumbled in the latest economic recession and the overall change in our structured economy itself (lower wages, e.g.), had sought to re-invent themselves by attending schools of all stripes, so long as they were able to put off the bill until later.
Read the full post here.
The Subprime Education Crisis
By David A. Smith
Remember the subprime housing crisis? Now we have a subprime education crisis. This one is worse in two ways: asset-value recovery and a flawed governance model that is simply making the problem worse.
Read the full post here.
Tie Loan Payments to Employment Situations
By Conrad Egan
Student loans taken by optimistic and naive borrowers in anticipation of future increased job prospects, which often don’t occur, are now dragging down the economic recovery, hindering home purchases, and demanding outrageous payments for decades to come.
Read the full post here.
Does Public Policy Encourage Poor Choices?
By Mark Calabria
More than any other group, the great housing boom and bust of the 2000s was driven by younger households. At the previous bottom in 1995, the homeownership rate of households under 25 was just under 16 percent. This figure soared to almost 26 percent by 2005. By comparison households aged 50 to 54 saw their rate of homeownership increase by just over a single percentage point during this time.
Read the full post here.
Tight Regulatory Environment, Rising Student debt Hinder First-Time Homebuyers
By Charlie Dawson
As our housing market continues to heal from the economic crisis of the last several years, current and prospective homeowners are faced with the reality of an increasingly tight regulatory space that is contributing to a constriction of credit in the housing finance area. Rising student debt may impact consumer access to mortgage credit, their ability to save for down payments, and more broadly, attain homeownership.
Read the full post here.
Student Debt Stalling Promise of Homeownership for Younger Generations
By Stephen Banko
Like everything else in this increasingly polarized country, opinions vary about the impact of student loan debt on homeownership. But one thing is vividly clear – with the average loan debt per student hitting $33,000 this year, it can’t be a good thing for most students pining for their own place.
Read the full post here.
Increasing Student Debt Yet Another Reason for Balanced Housing Policy
By Michael Spotts
The number of households aged 25-34 with student debt increased by 50 percent from 2001-2010, ending the decade with nearly four in ten households with student loans. Though taking on student debt is often an all-too-necessary part of obtaining higher education, when it leads to a completed degree it can be a pathway to increased earning potential over a lifetime. However, the share of this age group with at least $50,000 in student debt has more than tripled—at a time in which average earnings for young college graduates have fallen by more than 15 percent since 2000.
Read the full post here.
Past Forums
July 2013: Who are unconventional stakeholders who can help rally support for housing?
December 2011: What are the most pressing issues in housing policy today?
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