According to a recently published report from the Federal Reserve Bank of New York, student debt is increasingly holding college graduates back from home ownership.
Studying youth demographics across all fifty states, the report states that the price of attending a public college rose 81% between 2001 and 2009. This rise in tuition is purportedly related to the 30% increase in average student debt between 2003 and 2011. Though these increases apparently do not negatively influence college enrollment among students, the accelerating accumulation of debt is directly connected to the eight-percentage-point drop in homeownership among 28-30 year olds from 2007 to 2015. The takeaway from this report is that college students are not afraid to inherit this ascending debt through schooling, but as a consequence, young professionals are forced to spend less and forgo the necessary wealth used to make big purchases, like buying a home.
The student debt crisis in this country is negatively affecting the economy in more ways than one. College students are a major part of the future of the American pecuniary system, and not investing in those students will yield a smaller investment from those students into the systems that keep the economy afloat. With a housing crisis in our recent memory, we as a country must address these problems headstrong to avoid another major financial crisis.
(Photo courtesy of Tristan Schmurr)