Everyone talks a lot about student debt these days.  Turns out there is a lot to talk about. Just 10 years ago, the average amount a student had in loans was $10,000.  Today, the average amount a student has in loans is more than triple that amount…$34,000. In fact, the total amount of student loan debt today is $1.3 Billion, three times what it was 10 years ago. With more students borrowing, and borrowing more to pay for their education, what effect does that have on them as future homebuyers?

The Federal Reserve Bank of New York just completed an analysis of the relationship between student debt and homeownership and the results are startling.  The NY Federal Reserve Bank found that any debt, “good debt” included, has real and lasting consequences.  (“Good debt” is often defined by student loans since education is considered synonymous with success.  However, education and the loans to pay for it are not a guaranteed ticket to success and wealth.  Throw in difficult economic conditions, unwillingness to relocate, unwillingness to take low paying, entry level job and good student loan debt becomes problematic.)

This analysis of the relationship between student debt and homeownership by the NY Federal Reserve Bank indicates that for college graduates between 30 – 36, “…any student debt hurts the chances of buying a home compared with graduates of the same age having no debt.”  How much having student debt hurts a person’s chances of buying a home is not indicated in this analysis.

There are a couple of caveats when making other comparisons, however.  The NY Federal Reserve Bank found that attending a 4 year college, even if you incur student loans and even if you do not graduate, still increases your chances of owning a home compared with those who never attended a 4 year college in the first place. And, if you come from a low income family, graduating college makes you almost as likely to own a home by age 36 as a person from a high income family.