Saturday, April 20, 2013

Student Loan Debt Keeping Millennials From Home, Car Loans

CFPB Takes Aim at Discriminatory Auto LendingIn recent years many studies have shown just how burdensome?student loan?balances have become for millions of borrowers across the country, but new data shows they are likely also playing a role in those consumers? ability or desire to take on other types of?debt. That trend could have a serious negative impact on both the housing and the auto markets.

Millions of young Americans may now be actively trying to avoid applying for?mortgages?and auto?loans?as a result of the massive amount of student financing they have taken on, according to new research from the Federal Reserve Bank of New York. The percentage of 25-year-olds with outstanding student loan debt has grown to 43% through the end of 2012, up from just 25% nine years earlier. And at the same time, the average amount of debt held on those balances climbed to $20,326, an increase of 91% from 2003?s $10,649.

[Credit Score?Tool:?Get your free credit score and report card from Credit.com]

Free Credit Check & MonitoringThis, in turn, has likely led to a significant decline in?mortgage?borrowing, the report said. Once the recession hit, 30-year-olds with no student loan debt saw their homeownership rates start to decline far more quickly than those who had student loans.?But, once the effects of the downturn reached those who had previously been insulated by higher salaries, their decline was far more stark. Today, some 24% of 30-year-olds without student loan obligations have home loan debt. Prior to 2011, 30-year-olds with student loan debt had far higher ownership rates in every year since 2003.

Meanwhile, the same was once true of 25-year-olds with auto loans in their names, but now that is no longer the case, the report said. Around early 2010, the percentage of these consumers with student loan debt and without it converged, and have been moving closely together ever since. However, last year, the rate of ownership among those with education?loan?balances continued to decline at roughly the same pace, while that for those without it began to level off somewhat.

[Student Loans:?Research and compare options for student loans at Credit.com]

The average college graduate now leaves school not only with student loan debt, but also?credit card?balances that can total thousands of dollars or more, and make it far more difficult to gain financial independence soon after moving into the real world.

Image: Brand X Pictures

Credit.com offers straightforward tips and advice to help you make smarter financial decisions. Visit Credit.com to sign up for your FREE Credit Report Card and find out where you stand today! Have a question for our experts? Connect with us on Google+.

Source: http://feedproxy.google.com/~r/credit/blog/~3/oJuOtv9gbTQ/

The Following Anna Burns Welker Martin Luther King, Jr. Mlk Quotes Elder Scrolls Online joe biden michelle obama

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.