In a new report out from the Federal Reserve, rising student debt has been linked to a drop in homeownership among young Americans as well as to the flight of college graduates from rural areas. Homeownership among people ages 24 to 32 fell 9 percentage points, to 36 percent from 45 percent, between 2005 and 2014, the Fed said.
While many factors affected the homeowner rate, the Fed said 2 percentage points, or about a fifth, of the decline was tied directly to student debt. That translated into 400,000 borrowers who could have owned a home by 2014 but didn’t because of student loans.
The effect of student debt on the economy has increased in recent years, as the total has soared to $1.5 trillion. That's a greater debt load than Americans’ credit-card and car-loan bills.
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