Borrower in Distress: A Survey on the Impact of Private Student Loans

For most, a college degree is a path to economic security. These days, that path is bumpy for many, and leads to years of indebtedness that delay steps into adulthood that were once a given – buying a home, buying a car, starting a family. For some, it gets worse: that path turns into a dead end of debt and distress.  Recently, the Federal Reserve of New York released data demonstrating that student loan debt is constraining this generation from participating in broader economic activities such as purchasing homes and cars.1  During the housing boom, homeownership among student debtors was actually 4 percentage points higher than among non-student debtors. Homeownership rates fell across the board during the recession – 30 year-olds with no student debt saw their homeownership rates decline by 5 percentage points – but 30 year-olds with student debt fell more than 10 percentage points. The homeownership rate for student debtors is now almost 2 percentage points lower than for non-debtors.

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