School Loans and Home Ownership – Are They Incompatible?


You’ve heard, haven’t you?

Today’s young adults aren’t buying houses like those of yesteryear. Rather, as the stories go, they’re living roommates (yes that includes parents!), renting not buying, or blowing paychecks on anything but a house, a condo, or a bungalow.

Sure, housing prices rapidly outpaced incomes since 1980. But, so has college attendance!

And, based on the Law of Unintended Consequences, the otherwise positive occurrence has led to incredibly burdensome school debt.

According to statistics, as of 2015, students with school loans graduated with 70% more debt than those just a decade earlier, at an average of $34,000. The amount as of 2017 was $37,000.

That could be 2-4 decades worth of repayment…

And college grads with debt save half as much for a downpayment as those without, taking about four years longer to make the jump to home ownership.

Skip school? Not the answer…

Those without a degree have a much tougher road to owning a home.

Typically, the quicker a downpayment can be made, the quicker the mortgage is satisfied, the longer one can save for retirement.

Perhaps the ever-increasing cost of a higher education and the importance of that education may be partly to blame. Graduating from college improves access to higher paying employment and increased future earning potential. A 2011 study showed that bachelor’s degree holders earn a lifetime average of $2.27 million, versus $1.3 million with a high-school diploma.

Anecdotally, college grads with and without debt may avoid home ownership for reasons such as a shift away from a suburban lifestyle, desired delays in starting families, a deep-seated post-2008 distrust in the housing market, or a simple desire for increased mobility. There’s little evidence to support these theories.

When young adults were asked about future home ownership goals, 80% wanted to be a future home owner. Unfortunately, almost 75% believe school debt is preventing the purchase.

If you or anyone you know is nearing or hopelessly mired in a similar situation, please consider our debt elimination program. It’s designed to help individuals and families eliminate debt, including mortgages and student loans, typically in 9 years or less.

Contact us to schedule your free, no-obligation evaluation. You have nothing to lose; but, you might just have freedom and peace of mind to gain.

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