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In the United States student debt is a growing problem as more young adults attend college and these students fund their education with student loans and the costs of education continue to increase across the country. Many observers have noticed that students graduating with large amounts of student debt are unable to purchase those things typically associated with educated people such as new homes. The apparent connection is the inability to meet savings and income requirements to receive a mortgage for a house purchase due to student loan payments. New graduates are delaying important stages of their life such as having children or buying homes by as much as seven years. Given the importance of family development and homeownership to the economy in the United States this is beginning to have impacts on the economy. Policymakers might start to address concerns related to high levels of recent graduate indebtedness through loan forgiveness or other initiatives that address the issue in a reactionary way. They may also start to address the root cause of the problem which is the high costs of higher education. This study is interested in the potential effects of student debt on homeownership in the United States. It is hypothesized in this paper that levels of student debt have a negative effect on homeownership.

Debt constraints, Student loans, Homeownership