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Student Loans and Homeownership

Alvaro A. Mezza (), Daniel R. Ringo (), Shane M. Sherlund () and Kamila Sommer ()
Additional contact information
Alvaro A. Mezza: Board of Governors of the Federal Reserve System (U.S.), http://www.federalreserve.gov/econresdata/alvaro-mezza.htm
Daniel R. Ringo: Board of Governors of the Federal Reserve System (U.S.), http://www.federalreserve.gov/econresdata/daniel-r-ringo.htm
Shane M. Sherlund: Board of Governors of the Federal Reserve System (U.S.), http://www.federalreserve.gov/econresdata/shane-m-sherlund.htm
Kamila Sommer: Board of Governors of the Federal Reserve System (U.S.), http://www.federalreserve.gov/econresdata/kamila-sommer.htm

No 2016-10, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (US)

Abstract: We estimate the effect of student loan debt on subsequent homeownership in a uniquely constructed administrative dataset for a nationally representative cohort. We instrument for the amount of individual student debt using changes to the in-state tuition rate at public 4-year colleges in the student's home state. A $1,000 increase in student loan debt lowers the homeownership rate by about 1.5 percentage points for public 4-year college-goers during their mid 20s, equivalent to an average delay of 2.5 months in attaining homeownership. Validity tests suggest that the results are not confounded by local economic conditions or changes in educational outcomes.

Keywords: Credit Constraints; Homeownership; Student loans (search for similar items in EconPapers)
JEL-codes: D14 I22 R21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ure
Date: 2016-02-12, Revised 2017-07-28
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