DS News is reporting that student loan debt is preventing potential homebuyers from buying homes in America. Student loan debt is at $1.2 trillion and growing. The rising cost of tuition and the increase in the number of college students is causing more debt in the U.S. and hurting the U.S. economy. The Consumer Financial Protection Bureau reports that 7 million Americans are in default on their student loans. For those who default at a young age, the black mark on their credit report may prevent them from buying a home, and in some cases, can prevent one from getting a job.
The decrease in new household formation is preventing economic growth. The homeownership rate for young people is down 15% from the peak which was prior to the financial crisis.
To deal with this issue, some employers are creating programs to help employees pay down their student loan debt. Congress needs to take a good look at this growing economic crisis and universities need to put more thought into their tuition structure and into helping students after graduation.
