So, it's not avocados after all: Fed says student debt prevents young adults from buying homes

[applegrove]

Last edited Fri Jan 18, 2019, 09:08 PM - Edit history (1)

https://thinkprogress.org/federal-reserve-student-debt-home-ownership-81dc87219d9f/

ELHAM KHATAMI at Think Progress

"SNIP....

At the same time, average student loan debt among young people has also doubled from about $5,000 in 2005 to $10,000 in 2014. The Fed reported that in the first quarter of 2018, outstanding student debt reached a staggering $1.52 trillion, almost triple the amount from the previous decade.

The Fed said it is likely that more than 20 percent of the overall decrease in homeownership among young people is due to student loan debt. “This represents over 400,000 young individuals who would have owned a home in 2014 had it not been for the rise in debt,” the report stated.

“Our estimates suggest that student loan debt can be a meaningful barrier preventing young adults form owning a home,” the report added, explaining that high student loan debt can lead to a lower credit score, ultimately impacting a person’s ability to qualify for a mortgage. High student loan payments can also adversely affect a person’s ability to save for a down payment on a mortgage.

The Fed report comes as higher education costs continue to increase, with financial aid in the form of grants and tax benefits failing to keep up the pace.

....SNIP"

Applegrove:

People who have financial anxiety vs. just low income vote more intuitively rather than rationally. They vote using feelings and mental shortcuts. People like Trump get elected. Ontario's conservative government has just converted some university grants for the very poorest to loans. They are giving a $500 tax cut to everybody else for 3 years as cover. They seem to want the same voting as the Republicans do in the USA. IMHO

Read the book Enchanted America: How Intuition and Reason Divide Our Politics

[Crutchez_CuiBono]

1. 'magine 'nat.

As if that took some great analysis and an epiphany, right? Enslaved to be smart. Then on the street w a degree. Dang it. Americans get a screwed up raw deal. Canada? Not so much. At all. Good OP. Ty.

[applegrove]

2. The financial anxiety thing is from a book called Enchanted America:

How Intuition and Reason Divide Our Politics. Great book.

https://www.amazon.com/Enchanted-America-Intuition-Reason-Politics/dp/022657850X

[Midnightwalk]

3. Shocking right?

That seed corn sure was sweet though. (Sarcasm)

Sorry for being lazy. Does the article have an estimate for how much debt will reduce GDP?

[applegrove]

5. No. It does not talk about GDP.

[MontanaMama]

4. I started a college savings account - mutual fund

the week my son was born in 2005. I could only afford $25 a month then...when he was 2 I bumped it to $50 a month and now I’m saving $200 a month. I’ve never missed a payment and still I’m not sure it’ll pay for his college. It might if he goes to school here in town (University of Montana) but it won’t if he goes out of state. I don’t know how these kids start a life after college with so much debt weighing them down. It’s not right.

[applegrove]

6. We get some americans in Canadian Universities who like the lower fees.

[MontanaMama]

8. Wait.

I never knew about that. So... American kids can go to college in Canada? I’m not trying to sound like an idiot...I just never even thought about that possibility.

[applegrove]

10. Oh yeah. Tuition is higher than what Canadians pay. But less than what

you pay in the US. Plus the Canadian dollar is less.

https://www.iecabroad.com/usa-vs-canada-cheapest-country-study/

[MissB]

9. Now is the time to let him know

that you’ll cover the cost if he stays in town. We always told ours that if they wanted to go out of state then they had to earn the merit to make up the difference.

Both kids go out of state. They concentrated on applying to schools that offered great merit for their stats. (One is in Montana!)

[MontanaMama]

11. You're right about letting him know.

And we talk about it all the time. There is the WUE Program (Western University Exchange)that could help too. Kids in that program can go to various western state universities for in state tuition...some restrictions apply. Still, though, it’s SO expensive and requires a lot of planning so that it doesn’t break the bank.

[Maven]

7. Time to break this out again

[akraven]

12. I spent 12 years paying off student loans.

On top of the grants and gimmes. This should not be happening. Period. Universities have upped the bucks every quarter/semester since student loans first came available.

[sinkingfeeling]

13. Yep, my son and DIL were older went they got their degrees in 2011 and 2014. In 2015,

with a combined income of $90,000 and a $30,000 down payment, they could not qualify for a mortgage. Cause: $110,000 in student loans.