Syracuse staff writes “Economists have long lamented the effect rising student loan debt could have on the larger economy, including homeownership. And now a new generation is hoping to move from the dorm room to their own living rooms. But how will millennials navigate the financial tension of paying off their student loans while taking on new homeownership debt?”
“Also growing: the number of millennials who live with their parents. The percentage of 18- to 34-year-olds living in their parents’ home grew from 26 percent to 34 percent in the decade ended in 2015, according to the Census Bureau External link. That’s about 23 million people, up from nearly 15 million in 1975.” And what if millennials strapped with student loan debt do are not able to live with their parents and cannot afford to buy or rent their own homes? Those millennials may experience homelessness or be at risk of becoming homeless.
In New Jersey, in Newark/Union, the average individual student debt balance is $30,100, in Northeastern New Jersey, it is $30,600, in Edison, New Brunswick it is $31,200, and in New York/Newark, Jersey City, it is $32,800.
The online MBA program at Syracuse University analyzed contributing factors and rates at which millennials in the New York tri-state region experience disparities in student debt and homeownership. The analysis also covers remedies to this crisis.
For example, companies like Eagle Home Mortgage, an affiliate of Lennar Corporation, offered to pay down student loans totaling up to 3 percent of the purchase price of a new home.
“Christie Novak, an accounting professor at the Martin J. Whitman School of Management, said it was tough for students and their parents to pay attention to, or calculate, the effect of a school loan on a student’s ability to get a home loan.”
“I think when you’re going to school, it’s tough to think that far ahead,” she said. “Once you’re out of school, you’ve realized that you’ve taken on all this debt.”