Student loans are haunting graduates long after school. One study shows a daunting decrease in homeownership ages 25 – 34, the same range with the most student loans. Student loans can be re-evaluated and sometimes lowered, and the only way to have it completely forgiven are for those who can prove they are unable to work to pay for student loans.
For workers who have experienced a disability, there’s the Social Security Disability option that will forgive student loans entirely. To be eligible for “ Total and Permanent Disability (TPD) discharge ” of student loan debt the individual must be “unable to engage in any substantial gainful activity because of a medically determinable physical or mental impairment.” The impairment must either “be expected to result in death,” or last for a “continuous period of not less than 60 months,” according to the U.S. Department of Education.
For countless individuals struggling with student loans who aren’t eligible for Social Security Disability, the way to adjust is in the details. Student loans have pushed many to focus on short term rather than long term. Renting becomes a more viable option than owning for those with unforgiving student loans.
“What seems to be happening is you have a pause in your housing pipeline,” Mr. Dyer , lending practice lead for the Carlisle & Gallagher Consulting Group, said. “Where a younger generation would normally be buying homes, it’s just not happening.” Rates in the 25-to-34 age group dropped by nearly 8 percentage points from 2004 to 2013, according to a recent report from Harvard University’s Joint Center for Housing Studies .
It’s not necessarily the dollar amount of student loans that have contributed to this trend, but rather the impact of needing to pay off student loans in a slow economic market. With the average person making less money (or being unemployed) those student loans are sticking around longer. The millennial generation have found themselves more reliant on student loans. This generation has experienced rising education costs, a prolonged weak economy and higher unemployment. Because of these same factors, even those hoping to purchase a home are finding it hard to afford or qualify for a mortgage.
Now that the economy is on the return it’s hoped that the burden of student loans will decrease. Generations are finding it slightly easier to find jobs than was the case a few years ago, making student loans a little easier to bear.