Dec 12, 2013
Student Loans a Drag on Graduates and the Economy
Posted on May 11, 2013
Crippling student debt is keeping hundreds of thousands of Americans from spending money on goods and services in the real economy, which is constraining the nation’s recovery.
A new Federal Reserve Bank of New York study found that 30-year-olds with student debt were less likely to have other debts, like home mortgages, than their peers without it. The same was true for 25-year-olds and car loans.
Millennials are being forced to get by on 15 percent less income than the previous generation. This means less money to spend on restaurant meals, clothes and other purchases.
The Pew Research Center says the debt to income ratio for households run by people under 35 was 1.5 to 1 in 2010, up from 1 to 1 in 2001. Contrary to previous generations, the debt held by the younger one is more tied to student loans than homes.
—Posted by Alexander Reed Kelly.
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