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This report builds on past findings from NAR and explores the current role of student loan debt and the relationship to homeownership.1 The findings show that student debt does hold back home buyers. While the themes are consistent based on past research, the current report expands the knowledge base by exploring the role of the current Federal Government Stimulus packages and the role the current COVID-19 pandemic has played on debt.
Key Findings
On Employment
While the plurality say student loan debt has not impacted any of the tested employment decisions (42%), others say debt has kept them in disliked or uninteresting jobs, forced them to take second jobs, or take a job outside their preferred field.
- Those holding debt for multiple people are more likely to say student loan debt has impacted their employment decisions.
- Millennials are more likely than other generational cohorts to say they have had to stay in a job they were not happy with (18%), take a second job (17%) and take a job in the private sector over the public sector (17%) because of student loan debt.
On Major Purchases
Over one quarter of student loan debt holders say their debt has impacted their decision or their ability to
purchase a home (29%), take a vacation (35%), or purchase a car (31%).
- Student loan debt holders without an emergency fund and those holding debt for multiple people are more likely to say their debt has impacted their ability to make the purchases tested.
- When asked specifically about purchasing a home, half of non-homeowners say student loan debt is delaying them from purchasing a home (51%).
On Life Choices
Approximately half of student loan debt holders say their debt has impacted their life choices. One third say it has impacted their ability to continue their education (33%) while 14% say it has impacted their decision to start a family.
- Those holding debt for multiple people and those who say debt has delayed a home purchase are more likely to say debt has delayed their life choices.
- Younger generations (GenZ and Millennials) are more likely to say student loan debt has impacted their decision to continue their education, start or continue a family, have a long-term partner, and get married.
Awareness of Costs
Only one quarter of student loan debt holders say they had a good understanding of costs involved prior to attending college and taking on student loan debt for themselves (23%).
- Student loan debt holders are more likely to say they knew more about the costs involved when taking on debt for a dependent or child (39%) compared to taking on debt for themselves (23%) or a spouse (26%).
- Among those who say debt is delaying a home purchase, 18% felt they had a good understanding of the costs involved, compared to 23% of student loan debt holders overall who say the same.
Imagining a Future Without Student Loan Debt
When adults who have not yet paid off their student loan debt are asked what they would do with additional funds, they say they would contribute to long-term savings (43%), pay off other debts (40%), invest (38%), or purchase a home (24%) or car (22%).
- Millennials (31%) and those who say debt is delaying a purchase of a home (46%) are more likely to say they would use the funds towards the purchase of a home.
- Adults who have paid off their student loan debt say they use the additional funds to pay off other debts (34%), contribute to long-term savings (31%), or invest (26%). 13% of these adults say they use the funds to contribute towards the purchase of a home.
Download the executive summary
1 Since 2013, the National Association of REALTORS® (NAR) has collected primary research examining the effect student loan debt has on successful and potential home buyers.
The analysis from the latest research—The Impact of Student Loan Debt—is modeled off of reports conducted in 2016 and 2017 by the National Association of REALTORS® and American Student Assistance.
