After being relentlessly told they should go to college for their entire lives, many Millennials are waking up to the reality that their student debt and poor job prospects prohibit them from purchasing homes.
The Federal Reserve has done research that shows that student loan debt is preventing young Americans from purchasing homes. Josh Mitchell and Laura Kusisto report:
The Federal Reserve has linked rising student debt to a drop in homeownership among young Americans and the flight of college graduates from rural areas, two big shifts that have helped reshape the U.S. economy.
The effect of student debt on the economy has been debated in recent years, as the total has soared to $1.5 trillion, surpassing Americans’ credit-card and car-loan bills. Congress and various White House administrations have pointed to federal student loans as a key way for Americans to pay for college and boost their career earnings. Critics have said the debt is damaging the economic prospects of a generation of Americans.
The Fed research published Wednesday didn’t offer a verdict on those assertions. But it showed that student debt is linked to key life decisions for some—including whether to buy a home and where to live.
Homeownership among people ages 24 to 32 fell 9 percentage points, to 36% from 45%, between 2005 and 2014, the Fed said. While many factors affected the homeowner rate, the Fed said 2 percentage points, or about a fifth, of the decline was tied directly to student debt. That translated into 400,000 borrowers who could have owned a home by 2014 but didn’t because of student loans.
As Mike Rowe said on Tucker Carlson’s show, parents need to make work cool again.
Read more here.
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