DEBT SPIRILLING ; ...Combined private and federal student debt doubled since 2007 to $1.1 trillion, according to Consumer Financial Protection Bureau and New York Federal Reserve data, as parents became less able to fund educations in the years following the 2008 financial crash. Homes lost about a third of their value while prices tumbled, leaving many owners owing more on their mortgages than their properties were worth.
In the good years, parents frequently used home equity loans to pay for college, which made the interest payments tax deductible. About $7 billion of equity was cashed out for education at the height of the housing boom in 2006, according to a 2011 paper by Michael Lovenheim, a Cornell University professor.
‘Significant Reductions’ “Families experienced significant reductions in their home values and maybe dealt with unemployment and the loss of value in their retirement funds,” said Rohit Chopra, student-loan ombudsman for the CFPB, a regulatory agency set up in the wake of the credit crisis. “That meant parents had to shift the costs of higher education to their children, which meant higher student debt.”
The CFPB is developing policy recommendations for Congress, the Department of Education and the Treasury Department on ways to make student loan payments more affordable with modifications and refinancing options similar to those available to mortgage borrowers, Chopra said. The agency this week ended a public comment period seeking policy suggestions from borrowers and lenders.
Without changes, many graduates are being blocked from the property-owning aspiration known as the American dream, which according to JPMorgan Chase & Co. survived the real estate crash and record foreclosures. In a March survey, nine out of 10 people reported they want to own their own home, the bank said. Yet rental demand is at a 10-year high.
Rental Demand Thwarted would-be homeowners are helping to support rental demand for single-family foreclosed homes, the emerging institutional asset class that investors including Blackstone Group LP (BX), based in New York, and Colony Capital LLC, in Santa Monica, California are accumulating. The U.S. homeownership rate fell to 65.4 percent in the fourth quarter, the lowest since 1997, according to the Census Bureau.
“Buying a home and having a family are the hallmarks of middle-class American life,” said Robert Lawless, a professor at the University of Illinois College of Law in Champaign. “The hope is still alive, but for now a lot of people are being forced to rent because all their money is going to pay off their student loans.”
Nichter, author of “George W. Bush: Life of Privilege, Leadership in Crisis,” published last year, grew up in a suburb of Toledo, Ohio. While he pursued an education that culminated with a doctorate in philosophy from Bowling Green State University, many of his high-school classmates decided to skip college.
Debt-Free Instead, they got jobs, started families and bought houses by the time they were 30 years old, Nichter said. They could do that because they weren’t saddled with student debt. About 17 percent of Toledo residents over the age of 25 have college degrees, according to the Census Bureau.
DEBT SPIRILLING ; ...Combined private and federal student debt doubled since 2007 to $1.1 trillion, according to Consumer Financial Protection Bureau and New York Federal Reserve data, as parents became less able to fund educations in the years following the 2008 financial crash. Homes lost about a third of their value while prices tumbled, leaving many owners owing more on their mortgages than their properties were worth.
In the good years, parents frequently used home equity loans to pay for college, which made the interest payments tax deductible. About $7 billion of equity was cashed out for education at the height of the housing boom in 2006, according to a 2011 paper by Michael Lovenheim, a Cornell University professor.
‘Significant Reductions’ “Families experienced significant reductions in their home values and maybe dealt with unemployment and the loss of value in their retirement funds,” said Rohit Chopra, student-loan ombudsman for the CFPB, a regulatory agency set up in the wake of the credit crisis. “That meant parents had to shift the costs of higher education to their children, which meant higher student debt.”
The CFPB is developing policy recommendations for Congress, the Department of Education and the Treasury Department on ways to make student loan payments more affordable with modifications and refinancing options similar to those available to mortgage borrowers, Chopra said. The agency this week ended a public comment period seeking policy suggestions from borrowers and lenders.
Without changes, many graduates are being blocked from the property-owning aspiration known as the American dream, which according to JPMorgan Chase & Co. survived the real estate crash and record foreclosures. In a March survey, nine out of 10 people reported they want to own their own home, the bank said. Yet rental demand is at a 10-year high.
Rental Demand Thwarted would-be homeowners are helping to support rental demand for single-family foreclosed homes, the emerging institutional asset class that investors including Blackstone Group LP (BX), based in New York, and Colony Capital LLC, in Santa Monica, California are accumulating. The U.S. homeownership rate fell to 65.4 percent in the fourth quarter, the lowest since 1997, according to the Census Bureau.
“Buying a home and having a family are the hallmarks of middle-class American life,” said Robert Lawless, a professor at the University of Illinois College of Law in Champaign. “The hope is still alive, but for now a lot of people are being forced to rent because all their money is going to pay off their student loans.”
Nichter, author of “George W. Bush: Life of Privilege, Leadership in Crisis,” published last year, grew up in a suburb of Toledo, Ohio. While he pursued an education that culminated with a doctorate in philosophy from Bowling Green State University, many of his high-school classmates decided to skip college.
Debt-Free Instead, they got jobs, started families and bought houses by the time they were 30 years old, Nichter said. They could do that because they weren’t saddled with student debt. About 17 percent of Toledo residents over the age of 25 have college degrees, according to the Census Bureau. American Dream Eludes With Student Debt Burden: Mortgages http://bloom.bg/Yst2K6 via @BloombergNews ... cont/-
DEBT SPIRILLING ; ...Combined private and federal student debt doubled since 2007 to $1.1 trillion, according to Consumer Financial Protection Bureau and New York Federal Reserve data, as parents became less able to fund educations in the years following the 2008 financial crash. Homes lost about a third of their value while prices tumbled, leaving many owners owing more on their mortgages than their properties were worth.
ReplyDeleteIn the good years, parents frequently used home equity loans to pay for college, which made the interest payments tax deductible. About $7 billion of equity was cashed out for education at the height of the housing boom in 2006, according to a 2011 paper by Michael Lovenheim, a Cornell University professor.
‘Significant Reductions’
“Families experienced significant reductions in their home values and maybe dealt with unemployment and the loss of value in their retirement funds,” said Rohit Chopra, student-loan ombudsman for the CFPB, a regulatory agency set up in the wake of the credit crisis. “That meant parents had to shift the costs of higher education to their children, which meant higher student debt.”
The CFPB is developing policy recommendations for Congress, the Department of Education and the Treasury Department on ways to make student loan payments more affordable with modifications and refinancing options similar to those available to mortgage borrowers, Chopra said. The agency this week ended a public comment period seeking policy suggestions from borrowers and lenders.
Without changes, many graduates are being blocked from the property-owning aspiration known as the American dream, which according to JPMorgan Chase & Co. survived the real estate crash and record foreclosures. In a March survey, nine out of 10 people reported they want to own their own home, the bank said. Yet rental demand is at a 10-year high.
Rental Demand
Thwarted would-be homeowners are helping to support rental demand for single-family foreclosed homes, the emerging institutional asset class that investors including Blackstone Group LP (BX), based in New York, and Colony Capital LLC, in Santa Monica, California are accumulating. The U.S. homeownership rate fell to 65.4 percent in the fourth quarter, the lowest since 1997, according to the Census Bureau.
“Buying a home and having a family are the hallmarks of middle-class American life,” said Robert Lawless, a professor at the University of Illinois College of Law in Champaign. “The hope is still alive, but for now a lot of people are being forced to rent because all their money is going to pay off their student loans.”
Nichter, author of “George W. Bush: Life of Privilege, Leadership in Crisis,” published last year, grew up in a suburb of Toledo, Ohio. While he pursued an education that culminated with a doctorate in philosophy from Bowling Green State University, many of his high-school classmates decided to skip college.
Debt-Free
Instead, they got jobs, started families and bought houses by the time they were 30 years old, Nichter said. They could do that because they weren’t saddled with student debt. About 17 percent of Toledo residents over the age of 25 have college degrees, according to the Census Bureau.
... cont/-
DEBT SPIRILLING ; ...Combined private and federal student debt doubled since 2007 to $1.1 trillion, according to Consumer Financial Protection Bureau and New York Federal Reserve data, as parents became less able to fund educations in the years following the 2008 financial crash. Homes lost about a third of their value while prices tumbled, leaving many owners owing more on their mortgages than their properties were worth.
ReplyDeleteIn the good years, parents frequently used home equity loans to pay for college, which made the interest payments tax deductible. About $7 billion of equity was cashed out for education at the height of the housing boom in 2006, according to a 2011 paper by Michael Lovenheim, a Cornell University professor.
‘Significant Reductions’
“Families experienced significant reductions in their home values and maybe dealt with unemployment and the loss of value in their retirement funds,” said Rohit Chopra, student-loan ombudsman for the CFPB, a regulatory agency set up in the wake of the credit crisis. “That meant parents had to shift the costs of higher education to their children, which meant higher student debt.”
The CFPB is developing policy recommendations for Congress, the Department of Education and the Treasury Department on ways to make student loan payments more affordable with modifications and refinancing options similar to those available to mortgage borrowers, Chopra said. The agency this week ended a public comment period seeking policy suggestions from borrowers and lenders.
Without changes, many graduates are being blocked from the property-owning aspiration known as the American dream, which according to JPMorgan Chase & Co. survived the real estate crash and record foreclosures. In a March survey, nine out of 10 people reported they want to own their own home, the bank said. Yet rental demand is at a 10-year high.
Rental Demand
Thwarted would-be homeowners are helping to support rental demand for single-family foreclosed homes, the emerging institutional asset class that investors including Blackstone Group LP (BX), based in New York, and Colony Capital LLC, in Santa Monica, California are accumulating. The U.S. homeownership rate fell to 65.4 percent in the fourth quarter, the lowest since 1997, according to the Census Bureau.
“Buying a home and having a family are the hallmarks of middle-class American life,” said Robert Lawless, a professor at the University of Illinois College of Law in Champaign. “The hope is still alive, but for now a lot of people are being forced to rent because all their money is going to pay off their student loans.”
Nichter, author of “George W. Bush: Life of Privilege, Leadership in Crisis,” published last year, grew up in a suburb of Toledo, Ohio. While he pursued an education that culminated with a doctorate in philosophy from Bowling Green State University, many of his high-school classmates decided to skip college.
Debt-Free
Instead, they got jobs, started families and bought houses by the time they were 30 years old, Nichter said. They could do that because they weren’t saddled with student debt. About 17 percent of Toledo residents over the age of 25 have college degrees, according to the Census Bureau.
American Dream Eludes With Student Debt Burden: Mortgages http://bloom.bg/Yst2K6 via @BloombergNews
... cont/-