In recent years many studies have shown just how burdensome student loan balances have become for millions of borrowers across the country, but new data shows they are likely also playing a role in those consumers’ ability or desire to take on other types of debt. That trend could have a serious negative impact on both the housing and the auto markets.
Millions of young Americans may now be actively trying to avoid applying for mortgages and auto loans as a result of the massive amount of student financing they have taken on, according to new research from the Federal Reserve Bank of New York. The percentage of 25-year-olds with outstanding student loan debt has grown to 43% through the end of 2012, up from just 25% nine years earlier. And at the same time, the average amount of debt held on those balances climbed to $20,326, an increase of 91% from 2003′s $10,649.