We encourage young people to go to college and earn a degree because we know that doing so will dramatically increase their earning potential. However, there is a negative consequence to all of the hard work that students are putting in as they study at universities in New Jersey, Pennsylvania, and everywhere else in the US: crippling student loan debt.
The total amount of student loan debt racked up by U.S. college students and graduates now exceeds $1.3 trillion, according to the Federal Reserve Bank of New York. That figure represents a nearly 300-percent increase from just 10 years ago. Moreover, the rate of delinquency when it comes to paying back student loans is now greater than the rate of delinquency for any other type of debt.
Data also indicates that the average college grad has accumulated more than $35,000 in debt. This can cause serious problems for a person as they enter the workforce and attempt to live on their own and without any kind of financial assistance for perhaps the first time in their life.
Student Loan Debt Can Impact Homeownership
Homeownership is down across the country, declining from 69 percent in 2006 to just 63 percent in 2016, according to the U.S. Census Bureau. One of the primary reasons for this drop in homeownership is the inability of potential homebuyers to make good on their existing debt obligations. As a result, more and more recent college graduate are opting to rent instead of buy.
Of course, a person with significant student loan debt may find that their ability to buy a home is seriously hindered. A recent housing survey conducted by Fannie Mae found that student debt might actually be crushing the housing market. At a minimum, college graduates with massive student debt obligations could decide to delay their first home purchase.
One of the most startling results of the Fannie Mae national housing survey is that a college dropout is actually significantly less likely to become a homeowner than a person who merely obtained a high school degree and never went to college in the first place. The implications are clear: accumulating debt without actually getting the degree in the end can be devastating to a person’s financial future.
For more information, check out the Yahoo.com article, “How College Can Ruin Your Chances of Buying a House.”
If you are struggling with debt and could use some help with the home buying process, you should speak with a qualified real estate and debt management attorney immediately. Joel R. Spivack, Esq., is an experienced real estate and debt relief lawyer who can help you throughout the home buying, home selling, or home foreclosure process. Contact Mr. Spivack today to schedule a free consultation.