A new study found that millennials are willing to bite the bullet and take out loans to compensate for increased tuition rates, but at the expense of purchasing their future assets.
The Federal Reserve Bank of New York study is the first to examine the relationship between increased tuition, student loan borrowing, and home ownership among young people. The study found drastic decreases in homeownership among 28 to 30 year olds, with nearly 35 percent of the the decreases in millennial homeownership due to increased student loan debt.
Overall student borrowing is up by 13 percent, growing from nearly $360 billion dollars in 2004 to 1.4 trillion in 2017. With around 44 million borrowers the average student graduates with $37,172 dollars in debt. And while there were no significant findings to support a decrease in enrollment despite the added cost, they did find long term effects of these increases in homeownership.
Instead, the popular alternative to purchasing a home seems to be living with your parents. The study found that almost 45 percent of millennials 23-to-25 years old are opting to live with their parents while paying back their loans.
Still, with the lifetime financial burden, Ameritrade found that 6-of-10 college students say the price is worth it even at the expense of buying a home, getting married, having a child, or retiring.