We hear it all the time. The burden of enlightenment, student loan debt, is preventing people from becoming homeowners. Housing and Urban Development (HUD) Secretary Castro, at a recent National Association of Realtors (NAR) event, claimed that student loan debt is the main obstacle preventing millennials from buying a home.To support his position, Secretary Castro cited the number of individuals in the U.S. with student loan debt is 40 million. He also highlighted that 70 percent of students graduate with debt, and the average amount of student debt has increased 56 percent in the decade between 2004 and 2014.Even Larry Summers, former Treasury Secretary, and Joseph Stiglitz, a Nobel laureate in economics, have linked the rise in student loan debt to limited demand for homeownership.Those advocating ballooning student debt levels as the scourge of homebuying demand point to a dizzying array of data.According to a survey conducted by the NAR and the nonprofit American...
- Is a degree worth it? Yes, the average increase in annual earnings from having a college degree would pay off the average student loan to achieve that degree in less than three years.
- Three quarters of student loan debt holders within the age range of most first-time homebuyers have a monthly payment of less than $400. Yet, they earn more than $750 a month because of their education.
- They have $350 more to spend on housing than they would if they hadn’t gone to college.