Student Debt & Your Wallet
Fast Fact: Student debt is now growing at a rate of $3,000 per second. If we do not slow this rate down, our home values and our wallets could take some tough hits.
STUDENT DEBT IS NOW GROWING AT A RATE OF $3,000 PER SECOND. IF WE DO NOT SLOW THIS RATE DOWN, OUR HOME VALUES AND OUR WALLETS COULD TAKE SOME TOUGH HITS.
Think student debt is someone else’s problem? If you’re a homeowner, you’d be wrong. Here’s why:
FACT: Student debt exceeds credit card and car loans and continues to grow at the rate of $3,000 per second.
The more than $1.1 trillion in student debt is holding our next generation hostage, pushing the American Dream further out of reach for millions.
High student debt prevents many young graduates from qualifying for their first home mortgage, which means many current homeowners will have trouble selling – potentially impacting your own home’s value.
America’s college graduates have historically been more likely than non-college graduates to become homeowners.
But today a whopping 95% of students borrow for college and almost 15% of them default within a few years. Those who don’t default often struggle to make payments. As a result, this historical homeownership trend has begun reversing for the first time, with potentially significant long term financial and cultural implications for all of us.
FACT: 75% of the drop in new household formations is attributed to student debt.
What’s being done about it?
The good news is that the Consumer Financial Protection Bureau recognizes the ramifications of mounting student debt, and has declared it a top national priority.
It’s educating students, parents and the public on:
- How to compare student loans, and learn what the payment will ultimately be after graduation.
- How to manage college money to avoid more debt.
- How to pay off student debt as efficiently as possible, even when behind on payments.
It’s also holding learning institutions accountable, holding back federal financial aid dollars from schools with unacceptable default rates from the graduates.
If you have a child about to enter college, or know someone struggling with student debt, point them to the Consumer Financial Protection Bureau’s website, www.CFPB.gov, for assistance in getting affordable loans or paying off an existing one.