According to the 2024 National Association of Realtors Home Buyers and Sellers Generational Trends Report, 9% of younger boomer homeowners have student loan debt with a median amount of $34,400. One-third of them still carry $75,000 or more in student loans, the highest percentage among all age groups.
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On the other hand, only 4% of older boomer homeowners have student loan debt, with most having between $25,000 and $49,999. Less than 1% of older boomer homeowners still have $75,000 or more in debt from education.
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Student Loan Debt as an Obstacle to Homeownership
A significant number of people report that student loan debt is an obstacle to homeownership. Some, including boomers, have delayed buying a home as a result of debt acquired to attend college or grad school.
According to the same survey, 6% of people between the ages of 59 and 68 felt that saving for a down payment or a home was difficult due to outstanding student loan debt.
The Education Data Initiative found that this trend was true across most age groups. When surveyed, 72% of people with student debt who are not homeowners responded that they believed their debt would delay the purchase of a home.
Furthermore, homeownership among recent college graduates has declined 1.8% for every $1,000 of student loan debt since 2005.
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Is the Expense of College Worth It?
While student loan debt undoubtedly can play a role in a person’s financial security, affecting things like their debt-to-income ratio, most people would agree that a college degree is still worth the expense.
The National Center for Education Statistics noted that the median earnings of an individual who completed a bachelor’s degree was nearly 60% higher than someone who solely completed high school. Over time, higher wages can help to pay off the debt incurred during undergraduate school and lead to a more favorable long-term financial outlook.
Hope for the Future
Hopeful homeowners may have a brighter future than previous generations when it comes to student loan debt. For years, pressure has been mounting for state and federal agencies to take action to either reduce student loan debt in general or to provide a more realistic path for graduates to become homeowners.
In 2022, Representative Marcy Kaptur introduced a bill to assist creditworthy borrowers with federal student loan debt to purchase foreclosed homes owned by the government or other agencies. The Transforming Student Debt to Home Equity Act of 2022 proposed developing a program to allow some of the 44 million Americans carrying student loan debt to purchase one of the 15 million homes sitting vacant in neighborhoods throughout the country.
The bill was not the only action to help reduce or eliminate the heavy burden of student loans for college students. Several states passed legislation to waive enrollment fees at community colleges, with some discussing extending the programs, such as the California Promise Program Grant, to four-year degrees.
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Sources
National Association of Realtors, “2024 Home Buyers and Sellers Generational Trends Report.”
Education Data Initiative, “Student Loan Debt & Homeownership.”
The National Center for Education Statistics, “Annual Earnings by Educational Attainment.”
Congress.gov, “Transforming Student Debt to Home Equity Act of 2022.”
California Community Colleges, “California Promise Program Grant.”
This article originally appeared on GOBankingRates.com: Is College Worth It? Here’s How Much Student Debt Boomer Homeowners Have
