Reportedly, student loans have prevented 400,000 young citizens of US from purchasing homes, the Fed (Federal Reserve) asserts in the paper covering 2005 to 2014. The Fed has connected increasing student debt to a crash in homeownership amongst young Americans and the journey of college graduates from countryside areas; two large moves that have aided in reshaping the U.S. economy. The impact of student debt on the financial system has been discussed in recent years, as the total has ascended to $1.5 Trillion, exceeding Americans’ car-loan and credit-card bills.

Everyone is aware of the fact that millennials are profiting the housing market, diamonds, and other stuff that is good and holy. But it has been also said that millennials’ incapability to purchase homes is bonded to their compressing student debt. On the other hand, the Fed is actually just catching on to this facts and reality. As per to a new paper issued by the Fed recently, it stated that there is a connection between increasing student debt and decreasing home ownership amongst young Americans amid 2005 and 2014. The combined amount of American student arrears is presently at a whopping $1.5 Trillion. Obviously, this financial load is making it harder to purchase a home, which, in order, is impacting the housing market.

The Fed said that homeownership amongst people aged from 24–32 Years was decreased from 45% to 36%, which is a reduction by almost 9%, amid 2005–2014. While many aspects influenced the homeowner rate, the Fed said 2% points or almost 5% of the reduction was tied straightly to student debt. That interpreted into 400,000 receivers who could have owned a home by the end of 2014 but did not due to student loans. Analysts say this is mainly due to two reasons, first, by doing student loan payments there is a strain on finances, which makes tough to save money and do a down payment on a house. The second reason is the individuals who fall at the back on their student loans have inferior credit, which makes them unqualified for mortgages.