A study by the Federal Reserve Bank of New York reasoned that student debt is partially to blame for declining homeownership rates in the U.S. 

The Federal Reserve Bank of New York released a July report that pointed to student debt as one of the main contributors to the decline in homeownership across the United States.

In regards to homeownership and student debt, the report found that rising student debt and tuition is responsible for between 11 and 35 percent of the approximate 8 percent decline in homeownership. The decline in homeownership referred to consumers ages 28 to 30 and between the years 2007 and 2015.

A statement from the Federal Reserve Bank of New York read like this, “The results suggest that states that increase college costs for current student cohorts can expect to see a response not through a decline in workforce skills, but instead through weaker spending and wealth accumulation among young consumers in the years to come.”

The same study also found that public college tuition costs on average rose $3,483, or 81 percent, from 2001 up until 2009. Average student debt per capita among 24-year-olds also rose, and rising tuition costs was on the hook for $1,628 of that debt increase.

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Interestingly, the Federal Reserve Bank of New York released a study in April that reasoned education level was more to blame for decreasing homeownership numbers than was student debt. The April study found that homeownership rates among Americans who pursued a level of education beyond an associate’s degree were much higher than those who only attained an associate’s degree. These rates were regardless of how much student debt was taken on by the consumers.

The Student Loan Report actually ran a survey last year asking 1,200 college graduates who held student debt a multitude of questions regarding how their student debt was impacting other financial decisions.

The results of our survey reinforce what the Federal Reserve Bank of New York’s study found. 63 percent of respondents said that student debt was impacting their ability to buy a home. Additionally, 73 percent said their education debt was affecting their retirement saving plan, while 47 percent said student debt was holding them back from buying a car.

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