The Student Loan Debt and Housing Report 2017 by the National Association of Realtors and the nonprofit group American Student Assistance shows the obvious: Student debt delays household formation, home buying, and saving.
The U.S. currently has a student debt load of $1.4 trillion, which accounts for 10 percent of all outstanding debt and 35 percent of non-housing debt. The magnitude of the debt continues to grow in size and share of the overall debt in the economy. While this amount of debt has risen, the homeownership rate has fallen, and fallen more steeply among younger generations.
Student loan debt impacts other life decisions including employment, the state the debt holder lives in, life choices such as continuing education, starting a family, and retirement.
Twenty-two percent were delayed by at least two years in moving out of a family member’s home after college due to their student loans.
Among non-homeowners, 83 percent cite student loan debt as the factor delaying them from buying a home. This is most frequently the case due to the fact that the borrowers cannot save for a downpayment because of their student debt. Among homeowners, 28 percent say student debt is impacting the ability to sell their existing home and move to a different home. The delay in buying a home among non-homeowners is seven years and three years for homeowners.
Awareness of Tuition Costs
- Before attending college, 28 percent of borrowers knew generally the school “might be expensive” or “might be cheap”, but had no further information.
- More than one-quarter of borrowers had an understanding of tuition, but had little understanding of other costs such as fees and housing expenses.
- One in five borrowers understood all the costs including tuition, fees, and housing.
Defaults
- Thirty-two percent of student loan borrowers surveyed had defaulted or forbore on their student loan debt
- Two-fifths of borrowers who had personal incomes of less than $25,000 in 2016 had defaulted or forbore on their student loan debt in the past.
Life Choices
- Among life choices, more than half of respondents believe they are delayed in continuing their education or starting a family due to student loan debt.
- Forty-one percent would like to get married, but are delayed from marriage due to their student loan debt.
- Only 13 percent of respondents did not have a life event delayed due to debt.
- 28 percent of respondents rent with roommates.
- Fifteen percent live with friends or family and pay rent, and 15 percent live with friends and family and do not pay rent.
- Twenty percent own their own home and 16 percent rent solo.
- Thirty-five percent of younger millennials live with family (both paying and not paying rent) compared to just 24 percent of older millennials.
Student Debt Impacts
Mish Notes
- Younger millennials are those born 1990 to 1998. Older millennials are those born 1980 to 1989.
- The study did not ask how many regretted going to college.
- The study did not ask how many regretted paying what they did pay for college.
Mike “Mish” Shedlock
When you make loans easily available to everyone, this is what happens. Problem is you can’t just walk away from student loan debt like you can with a home.
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When you make loans easily available to everyone, this is what happens.
It’s also what one can expect from Guaranteed Living Wage programs.
History proves beyond a shadow of a doubt what happens when governments interfere in cost structures and “affordable” programs.
Student loans were supposed to help students. It crucified them.
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Governments!
Only a “necessary” evil for some social goods……….
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Or more accurately: Completely unnecessary and 100% evil.
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I could agree with that statement – based on my personal experiences with GOOBER-MINT employees.
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“Problem is you can’t just walk away from student loan debt like you can with a home.”
And that’s the problem. Absent that particular sleight aimed at reintroducing slavery into America, the whole “problem” with student debt would be very much self correcting.
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“Before attending college, 28 percent of borrowers knew generally the school “might be expensive” or “might be cheap”, but had no further information.”
…
Sounds like well informed individuals who fully comprehend what their signature on a 5 (or ultimately 6) figure document entails.
Looking back when I graduated high school. Didn’t know a damn thing. My Dad took me down to the bank to set up a checking account a month prior to going off to school. He had to show me how to write … and keep track of … checks.
Yep, I was quite qualified to make major financial decisions … that would have repercussions years down the road.
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So the GDP adder of household formation takes a hit.
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This is a study by the National Association of Realtors and the American Student Assistance non-profit. They joined forces for a fake study to make a bid for student debt forgiveness so they can sell more houses, and drive up the prices.
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Make student loans easily available. Invite in 800,000 H1b employees who overstay their visas with the blessings of big corporations and their lobbyists. Then outlaw bankruptcies for student loans. Sit and wonder why millenials protest. Only in the USA.
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All those things are justified by the “free market”, “corporations are people”, “money is speech” folks.
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Fascism. And you support it. Created by the Democrats to feed their cronies in academia.
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@wildbull +1000
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Hmmm … I don’t think they’ve had enough time to study the problem. It’s probably much worse than they make it out to be.
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“Congratulations, you made it!”
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Around here the students drive up the cost of luxury apartments: pools, spa, aerobics, weight rooms, computer/fax, free yoga, free coffee service, free bus service, parties with free beer, eats, music. I’m guessing they don’t eat peanut butter either. Uncle sugar pays for these snowflakes.
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The problem is a lack of parenting. Instead of insisting that their precious little snowflakes go to a community college for 2 years and save a ton on money by doing so, they let them go away and live on campus at the university so they can have a life experience. BTW this usually means drugs/alcohol/sex. I have even seen parents let their children live on campus at a local state university that was within a short drive. Parents now have no balls, spine whatever. They are afraid they will hurt their kids feelings and that they will get mad at them. Whenever my kids felt I was being tough I tell them to not take it personal its just business. I am doing my job as a parent.
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Drugs/Alcohol/Sex are much less common among the current generation. Or so I’ve read.
My son goes to community college and I agree it’s a wise decision. I told him he could either take out a loan and go wherever he wanted or I would pay for community college. Thankfully he didn’t call my bluff. I would have paid either way. No way am I going to allow any of my kids to be saddled with debt coming out of college.
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I suppose it hasn’t changed much since I was in college. At least half the student body were there to party w/ their friends, not to study. They had no business being in college. But back then it was unheard of for an undergrad to have $5000 in student debt.
Of course the problem is that the bankers don’t have to eat their losses when the kid goes delinquent on the loan, since the loans are guaranteed by the Feds. So the banker becomes a salesman, along with the university president to fill another seat.
Seriously, what’s a 4 year liberal arts or social science degree worth in today’s job market? Squat. Any kid who comes out of school with one of those and $40,000 in student debt just got robbed. The banker knows it. So does the university president. Neither could care less.
It’s a racket.
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I don’t disagree with most of what you’re saying, but anyone that comes out of school with only $40k of debt doesn’t feel like they got robbed, they feel like they got off easy compared to that other sucker with $100k of debt for their equally useless degree.
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When I was in college, I was a serious student, having spent over a decade in the workforce first. There was one kid who was seriously not into schooling. I asked why he was there. He said “Because my daddy bought me a car.”
Ah, the good old days…
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Laws in this part of the world are one sided,business side! A good economic downturn will wake up a lot of minds, and it is coming.
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The study that shows how many years their retirement is delayed won’t be out for a few decades…
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No one seems to bring up the military as an answer. My daughter said she did not want to waste her life on 4-6 years of glorified high school. She wanted travel and joined the Navy. She did get to travel but after she spent 2 years studying nuclear and electrical engineering. After she put in her 6 (nukes enlistments are 6 years due to the education for 2 years) and had a job as soon as she was looking for one. She has NO debt, savings in the bank, and makes $70k+ spectacular benefits. One big problem-she can’t find men-boys yes, but no men.
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Colleges spewing out feminists by the truck load, and half of those feminists are male 🙂
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Just one more intended policy with one of the consequences being the furthering of the depopulation meme. No money, no family formations. Birth rate among Americans now at all time low. It also should be noted that autistic males generally do not reproduce. It is estimated that by 2025, 50% of all male births will have some form of autistic disorder. Many scientists, as well as RFK, Jr attribute the scourge of autism to vaccine ingredients such as aluminum and mercury (both neurotoxic), glyphosate (thanks Monsanto) and specialized allergens. It’s called incremental genocide folks.
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Any proposal to make at least community college free will be met with howls of protest. But do the ones who protest even have a clue how much was the military budget hike this year? More than 100B. And you can be sure that there will be MORE increases in the future and no cuts EVER. 100B can fund free community college for 3 years.
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Why mess with the one part of the college system that isn’t screwed up?
Free community college would be a disaster. If it’s free, everyone will sign up. They have nothing to lose. Colleges won’t be able to handle all the new students. What you’ll have is full enrollment with half the kids dropping out before course completion. A lot of serious students won’t be able to attend.
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Must watch!
Teachers with $290,000 student debt.
Game over!!!!
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Easy solution to all this. get the colleges on the hook for all this debt. Maybe then they won’t offer worthless degrees on the soft sciences that put out nothing but chronic bitchers, complainers, and protesters. Problem solved.
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Agreed-although I’d allow bankruptcy with half the debt picked up by the school and the rest by the banks. Allow bankruptcy and the banks would get a LOT pickier on who they lend money to and how they disperse the money. I have a feeling a lot of educational institutions would go under fairly rapidly. There are a too many anyway.
I also think the banks would look at loans to trade school students a lot more favorably.
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“Easy solution to all this. get the colleges on the hook for all this debt.”
+1000
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Will the day ever come that students, both past and present, bogged down in unpayable debt, protest across the country en masse, tear up their student loan contracts and yell “we ain’t paying”.
(Similar to the protests against conscription.)
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I think it’s happening now. Without the protest.
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Make the colleges buy back the bad loans. Their defective product is at least half the problem.
And require better disclosure on student loans — how many years (decades?) will it take to repay the proposed loan? What kind of salary will be required to make such a repayment possible? How does that required salary compare with the average salary in this major / field?
Any college that misrepresents expected employment and salary levels after graduation is guilty of fraud, and should not be given immunity. Fraud is not something society should promote.
In short, make the colleges eat their own cooking. See how many minutes it takes them to purge the whole safe space, microagression, racial priviledge bullsh!t.
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I “traded” off my GI Bill (1980s Montgomery GI Bill) for student loan repayment. Best investment in myself I have ever made.
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Typical government thinking, create the problem then blame others when the crisis occurs. If I could see this years ago when they made student loans exempt from bankruptcy , others did too. This is all about banks exploiting another area for profit at the expense of others. Wake up. The banking financial complex run things. Just as they have always done throughout history. Banks told monarchs when they could wage war and on whom. No money, no armies. Wake up people.
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If the Keynesian economists believe that cheap money, deficit spending and more government spending will help the economy recover then why not forgive all of these loans. This would accelerate the growth of the economy through the increased spending of these students on homes, cars, appliances etc. After all we bailed out the banks on the same basic premise.
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