Dragged down by debt
Student loans might not stop you from buying a house, but they’ll probably delay it. According to a new study, half of undergraduates with student loan debt plan to put off buying a house because of them. In fact, most think they won’t be able to afford a home until the age of 35.Verify your new rate (Nov 19th, 2019)
Student loans delay life milestones
According to a new study from Clever Real Estate, 48 percent of undergrads say they plan to delay buying a house because of their student loans — and quite significantly.
On average, today’s college students don’t expect to buy a home until they’re 35 years old.
Students also plan to delay saving up for retirement, traveling abroad and having children due to their debts. Many say they’re putting off saving for emergencies, too.
The delays aren’t for lack of desire, though. The study shows that if their student debts were forgiven, 54 percent of undergrads would start saving for a down payment right away. Another 51 percent would start building up their emergency savings, while 45 percent would start planning for retirement. Others would pay off debts, buy a car or plan a vacation.
Debt and more debt
Students largely expect their loans to take between five and 15 years to pay off — but considering just over half actually know their loans’ interest rates, those estimates might not be too accurate.
To make matters worse, many student debtors are taking on other debts to get themselves through school. Almost a third of undergrads with student loans have taken out a personal loan, while nearly a quarter 24 percent are carrying a credit card balance.
As Thomas O’Shaughnessy, Clever’s head of research, explains, this can be a dangerous move.
“Student loan debtors are [eight times] more likely to take out an additional personal loan to finance their expenses during college, and 71 percent more likely to carry a credit card balance,” he said. “High-interest debt can create a perpetual cycle of debt that’s nearly impossible to escape.”Verify your new rate (Nov 19th, 2019)
Get today’s mortgage rates
Don’t let student loan debt keep you from your homebuying goals. Shop around and see what mortgage rates you qualify for today.