The Reality of Student Loans

The Reality of Student Loans

In a previous blog post of mine I reflected on the crippling effects of student loans for millennials. The amount of debt that students are accumulating is astronomical in comparison to previous generations. Much to no one’s surprise, a recent study by the National Association of Realtors and SALT affirms that student debt delays homeownership. According to the study, seventy-one percent of non-homeowners claim that the debt they’ve acquired from school is preventing them from being able to buy a home. Furthermore, the study concluded that more than half of the 3,000 surveyed weren’t even anticipating purchasing a home for more than five years. While the benefits of higher degree most certainly secure a stable employment for students, earning that degree is almost counterproductive in relation to their future. Tuition rates have reached astronomical levels over the past 40 years. As depicted in a chart for collegeboard.org, the average tuition rate for a four-year public school in 1975 was $2,387. Today, the average rate is $9,410, almost four times the amount it once was. Thus, while the degree may secure a stable job with a competitive salary, it’s at a cost to your financial future. A large part of what’s holding millennials back in the housing market is their ability, or lack there of, to save for a down payment. Student loans are often paid off in monthly increments. The couple of hundred in student loan payments, partnered with rent, insurance, bills and other expenses, makes saving for a down payment unfathomable. Down payment options are particularly affordable for first-time buyers today and unfortunately, most millennials aren’t able to...