Student-loan borrowers under 30 are retreating from the housing and auto markets, an analysis of data by the Federal Reserve Bank of New York shows.
Those with student debt show higher risk and have lower credit scores compared with those without it, according to the bank’s Liberty Street Economics blog today.
Outstanding educational debt is $966 billion, including loans taken out by students and their parents, the bank reported Feb. 28. More people taking loans for college and graduate school are failing to pay off their debt, with almost a third of borrowers in repayment delinquent at the end of last year, according to the Fed. Student loan debt is dragging on the economy, with young people less able to participate in buying homes or cars.
“Now, for the first time in at least 10 years, 30-year- olds with no history of student loans are more likely to have home-secured debt than those with a history of student loans,” wrote authors Meta Brown and Sydnee Caldwell.
The share of 25-year-olds with student debt has increased to 43 percent last year from 25 percent in 2003. The average student-loan balance among those 25-year-olds with student debt grew by 91 percent over the period, to $20,326 from $10,649.
In its report on student loan data, the New York Fed analyzes a sample of data provided by the Equifax Inc. (EFX:US) credit bureau.
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