The FRBNY report emphasizes the effect this indebtedness has had on “post-schooling economic activity” by examining the former’s correlation to other borrowing trends. In one striking illustration, it found that since 2008, just before the recession, the rate of home ownership for 30-year-olds has dropped twice as fast for those with student debt compared to those without.
Before the recession, 34 percent of 30-year-olds with student debt owned their homes, compared to about 30 percent of those with no student debt. Between 2009 and 2012, the rate of home ownership dropped for both groups, but by twice as much for the student debtors. Their home ownership rate fell almost 12 percentage points, compared to those free from student debt, which fell slightly less than 6 percentage points. In 2011 the trend-lines crossed, resulting in today’s figure, where 24 percent of 30-year-olds with no student debt own homes, compared to less than 23 percent of those with student debt.
The new feudalism.