Washington is taking greater notice of student debt-to-income ratios as more regulators weigh in on the issue.
In testimony before a U.S. Senate committee, Rohit Chopra, assistant director of the Consumer Financial Protection Bureau, said high debt-to-income ratios are keeping young adults from becoming first-time home buyers and are hurting housing recovery. He added that 75 percent of the overall shortfall in household formation can be blamed on reductions among adults aged 18 to 34.
A real estate agent told the CFPB that she routinely checks credit reports for prospective renters; and with student loans soaking up so much of their incomes, many applications are rejected. The National Association of Realtors has found that 49 percent of Americans cited student loan debt as a "huge obstacle" to homeownership.