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CARES Act (COVID-19 Stimulus) and Student Loans
Student Loan Pause Is Ending, With Consequences for Economy (The New York Times, Jun. 21, 2023)
The pause on payments, which under the CARES Act in March 2020 covered all borrowers with federally owned loans, is separate from the Biden administration’s proposal to forgive up to $20,000 in student debt. The Supreme Court is expected to rule on a challenge to that plan, which is subject to certain income limits, by the end of the month.
Student Loan Debt’s Impact on Home Ownership
Fifth of Millennials Say They’ll Never Own a Home: Survey Also Shows Half of Gen Zers Say Homes Too Expensive to Consider Purchasing in Near Future (Journal of Business, Nov. 22, 2023) E
“About 1 in 5 Gen Zers and 16% of millennials say they need to pay off their student loan debt before they’re able to buy a home.”
The Return of Student Loan Payments Could Put the Squeeze on Homebuyers (Money, Jul. 26, 2023)
“For housing, we should celebrate that many Americans were able to get a head start on saving for a down payment thanks to the forbearance program,” Ali Wolf, the chief economist of the housing-research firm Zonda, wrote in a June blog post. “As that policy ends, we need to understand that [those gains] since 2020 will again reverse.”
Can You Get a Mortgage with Student Loans? (Nerdwallet, Mar. 15, 2023)
With stable income, timely bill pay and emergency fund and retirement savings, you may be in a good position to buy a house despite your student loans. Included are some options to make a stronger application.
Student Loan Debt Found to Be a Major Contributor to Homeownership Disparities (Bankrate, Mar. 7, 2023)
A 2022 Bankrate survey reported that 64 percent of Black respondents and roughly 70 percent of Hispanic borrowers have delayed financial milestones – like buying a home – due to their student loan debt. In comparison, less than half of white respondents agreed.
Student loan debt and first-time home buying in USA (International Journal of Housing Markets and Analysis, Jan. 10, 2022)
“The authors find that having student loan debt does not by itself prohibit first-time home buyers. On the contrary, having student loan debt increases the likelihood of homeownership by 15.1%. People with student loan debt, however, buy homes that are 39.2% less expensive and have 58% less home equity compared to first-time home buyers without student loans. In addition, it is found that the amount of student loan debt is important. People with student loan debt above the median amount among people with student loan debt ($35,000) are 27% less likely to be first-time home buyers.”
The Impact of Student Loan Debt (National Association of REALTORS®, Sep. 2021)
Homeownership among Young Americans: A Look at Student Loan Debt and Behavioral Factors
- While the plurality say student loan debt has not impacted any of the tested employment decisions (42%), others say debt has kept them in disliked or uninteresting jobs, forced them to take second jobs, or take a job outside their preferred field.
- Over one quarter of student loan debt holders say their debt has impacted their decision or their ability to purchase a home (29%), take a vacation (35%), or purchase a car (31%).
- Approximately half of student loan debt holders say their debt has impacted their life choices. One third say it has impacted their ability to continue their education (33%) while 14% say it has impacted their decision to start a family.
(The Journal of Consumer Affairs
, March 1, 2018) E
From Abstract: “Three key findings arise from the research. First, life cycle and demographic characteristics, such as marital status, education, and income, continue to be strong predictors of homeownership. Married households with a college degree and children are among the most likely to own a home. Second, young adults with student loan debt are no more or less likely to own a home than someone without debt after controlling for a number of factors; however, students who have already paid off their loans are more likely to own a home. Finally, respondents who express a willingness to take risks in finances are more likely to own a home while those who are more conscientious are less likely to own a home.”
Homeownership among Young Americans: A Look at Student Loan Debt and Behavioral Factors (Journal of Consumer Affairs, 2018) E
“[Y]oung adults with student loan debt are no more or less likely to own a home than someone without debt after controlling for a number of factors; however, students who have already paid off their loans are more likely to own a home.”
eBooks & Other Resources
Generation Debt: How Our Future Was Sold Out for Student Loans, Bad Jobs, NoBenefits, and Tax Cuts for Rich Geezers—And How to Fight Back (eBook)
The Impoverishment of the American College Student (eBook)
Sold My Soul for a Student Loan (eBook)
Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required (eBook)
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