Lost Wealth: Why the Real Estate Industry Should Hate Student Debt

August 1, 2013
student loan news

The real estate industry should join the fight to reduce student debt burdens, because the young adults who normally buy new homes increasingly are threatened by exorbitant college loans. According to a new Demos report, "At What Cost: How Student Debt Reduces Lifetime Wealth," an average student debt responsibility for a two-headed household with bachelors' degrees from four-year public universities ($53,000) generates a lifetime wealth loss of nearly $208,000. And more than a third of the loss ($70,000) is attributed to lower home equity. The student lending industry essentially is diverting money from housing, critics argue. Indebted young adults are unable to buy homes or renovate them; and this hurts home builders, real estate agents, and mortgage brokers. It is in the best interest of the real estate industry to support greater subsidies for public universities, generous grants for low-income students, and lower borrowing rates.
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