Abstract
We estimate the effect of student loan debt on subsequent homeownership in a uniquely constructed administrative data set for a nationally representative cohort. We instrument for the amount of individual student debt using changes to the in-state tuition rate at public 4-year colleges in the student’s home state. 8 percentage points for public 4-year college-goers during their mid-20s, equivalent to an average delay of about 4 months in attaining homeownership. Validity tests suggest the results are not confounded by local economic conditions or changes in educational outcomes.
I www.getbadcreditloan.com/payday-loans-ga/. Introduction
While the overall US homeownership rate has fallen markedly since the onset of the Great Recession, the ong young households. The homeownership rate for households headed by individuals aged 2432 fell 9 percentage points (from 45% to 36%) between 2005 and 2014, nearly twice as large as the 5 percentage point drop in homeownership for the overall population (Current Population Survey). In trying to explain this rapid decline, rising student loan balances have been implicated as an important drag on homeownership for the young by an array of economists and policy makers as well as by the popular press. 1 Theoretically, student loan debt could depress homeownership by reducing borrowers’ ability to qualify for a mortgage or desire to take on more debt. Læs mere A $1,000 increase in student loan debt lowers the homeownership rate by about 1