Student Loan Debt Obligations Impact Housing Market

Mortgage applications were down at the end of February to the lowest levels since 1995, and student loan debt is a permanent drag on the market in coordination with a bitter cold winter to put the brakes on the housing recovery. The pool of graduates were the new first time homebuyers in finishing the milestone of obtaining a college degree with entrance into the job market and income in hand. The fourth quarter rise in student debt for 2013 was six percent outpacing the 2 percent growth in mortgage debt. The $1.1 Trillion dollars in student debt is non-dischargable, and 37 million Americans are saddled with this permanent obligation until paid in full or death. The student loan debt is being compounded by graduates entering a anemic job market to accept employment with lower incomes to give the capacity to afford the student debt and mortgage debt together.

As a college graduate, student loan was not an issue as everything for college was paid in full at the time of graduation. This did allow for my ability to own two homes by the age of 25. The economy was producing high paying jobs, and the world has changed since the economic crisis. The student of high school looks forward today to graduation with option to pay for college is debt for a degree. We are doing a disservice for the future generations to stay on the current course, and student loan debt is a yoke of servitude that is unsustainable with ramifications to overall real economy. The debtor society has gone from the adult working consumer being able to have the home, car, boat, and second home to be leveraged to the point of insolvency to gifting our children with the same burden. Savers will always make better debtors. We could do better.