Are Student Loans Worth The Debt?

The report found that student debt remains the second largest source of household debt behind mortgages. The results are sure to add to the alarm about how the student loan burden could hurt housing recovery. A senior official at the Consumer Financial Protection Bureau recently warned that rising student loan debt may prove to be one of the more painful aftershocks of the Great Recession. Overall, consumer debt, including mortgages, auto loans and credit cards, increased by $241 billion during the fourth quarter of last year the largest quarter to quarter jump since the third quarter of 2007. Student debt increased to $1.08 trillion, up $53 billion in the last quarter of 2013 compared to the previous quarter. One fear is that the growing student loan debt burden is hobbling the recovery of the housing market, which is a key drive of economic growth.
Source: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/02/18/student-debt-is-terrible-in-charts/

According to her lender, the $500 she ponies up each month to repay her $30,000 student loan eats up too much of her income. “I didn’t know anything about buying a house when I took out a student loan, so it’s almost like I’m being blindsided by a decision I had to make years ago,” said McCloskey, an administrative assistant. The lending climate has become less forgiving for those carrying student debt, and that’s unlikely to change anytime soon. Federal rules that took effect last month grant mortgage lenders broad legal protections as long as they do not approve loans for prospective buyers whose total monthly debt exceeds 43 percent of their monthly gross income. The overarching goal is to protect borrowers against lender abuses. But the rules could also make it difficult for some buyers with student loans to obtain a mortgage.
Source: http://www.chicagotribune.com/classified/realestate/sns-wp-washpost-bc-loans17-20140217,0,3736662.story

This does not appear to be the case from the debt data. Student loan debt has grown at visit homepage almost exactly the same rate since the crash as it had been the previous five years i.e. steadily and without fail. Like the movie Up, student debt is a house attached to balloons. A second consideration in determining the economic drag of student loans is the distribution of debt.
Source: http://www.forbes.com/sites/joshfreedman/2014/02/11/student-loans-are-a-big-drag-on-the-economy-and-society/

Student debt may hurt housing market

Correspondent Kai Jackson reports, experts say the debt is so large it could have a ripple effect that will be felt across the country. Going to college is embedded in the American Dream. Yet there’s a nightmare now facing graduates and even those who drop out. A mountain of student loans they can’t pay off. It’s estimated the average student loan in America is just under $30,000.
Source: http://www.cbs12.com/news/top-stories/stories/vid_13334.shtml

According to her lender, the $500 she ponies up each month to repay her $30,000 student loan eats up too much of her income. “I didn’t know anything about buying a house when I took out a student loan, so it’s almost like I’m being blindsided by a decision I had to make years ago,” said McCloskey, an administrative assistant. The lending climate has become less forgiving for those carrying student debt, and that’s unlikely to change anytime soon. Federal rules that took effect last month grant mortgage lenders broad legal protections as long as they do not approve loans for prospective buyers whose total monthly debt exceeds 43 percent of their monthly gross income. The overarching goal is to protect borrowers against lender abuses.
Source: http://www.stltoday.com/business/local/student-debt-may-hurt-housing-market/article_84f84ae5-9fc7-528e-b9f8-356d0c239827.html

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