Unsurprisingly, homeownership rates between 2003 and 2009 were significantly higher for thirty-year-olds with a history of student debt than for those without. Student debt holders have higher levels of education on average and, hence, higher incomes. These more educated consumers are more likely to buy homes.However, this relationship changed dramatically during the recession. Homeownership rates fell across the board: thirty-year-olds with no history of student debt saw their homeownership rates decline by 5 percentage points. At the same time, homeownership rates among thirty-year-olds with a history of student debt fell by more than 10 percentage points. By 2012, the homeownership rate for student debtors was almost 2 percentage points lower than that of nonstudent debtors.
Car purchases mirrored this trend. Today, student borrowers are less likely to hold auto debt than non-borrowers. The study provides two reasons for this: young people might not be willing to take on further debt, or lenders may be less willing to offer loans to young people with plummeting credit scores.The red flags have become increasingly obvious over the past few months. Student debt, held by 43 percent of Americans under 25, has topped $1 trillion, and nearly 30 percent of student loans are delinquent. This, along with a brutal job market and the impending burden of Medicare and Social Security, adds up to a dismal outlook for the young.Once again, the boomers’ poor decisions are taking a toll on their children’s economic futures.