What’s Student Loan Debt Preventing You From Doing? A Lot of Things
Nicole wrote yesterday that the reason she’s not a homeowner is because, for her, owning a home means building a life together with someone else, and she’s still waiting for the right person to come along. At the same time Nicole’s post went up, the Associated Press reported another major factor that’s preventing young people from buying homes: student debt.
Before the 2008–09 downturn, 30 year-olds with student debt were more likely to have mortgages because of their higher levels of education and higher potential incomes, the New York Fed says. Now they are slightly less likely to have mortgages than 30-year olds without student debt.
“Student loan delinquencies and repayment problems appear to be reducing borrowers’ ability to form their own households,” said Donghoon Lee, a research officer at the bank.
Though I have never seriously considered buying a home, I would say that my student loans are the biggest roadblock to homeownership; I have no interest in taking on more debt by adding on a mortgage, and lenders would likely give me some side-eye when looking at my debt-to-income ratio.
As of July 31, , money was being deducted from Social Security payments to almost 140,000 individuals to pay down their outstanding student loans, according to Treasury Department data. That is up from just under 38,000 people in 2004.
I’ve managed to pay off half of my student debt over eight years since finishing grad school. I’ll see where I am on the home-buying front in another eight years.
Photo: COD Newsroom