Nearly 3 in 10 Borrowers Say Student Loan Debt Has Kept Them From Buying a Home — Here’s What They Can Do
Written by
Vance Cariaga
Edited by
Amen Oyiboke
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These are trying times for student loan borrowers. President Donald Trump aims to shut down the U.S. Department of Education and have the Small Business Administration take over federal student loan payments, Forbes reported. His administration could also end loan forgiveness programs for certain types of borrowers.
Meanwhile, student loan debt in the U.S. grew to $1.78 trillion in 2024 after declining the previous year, according to the Education Data Initiative. The average federal student loan debt balance is $38,375, while the total average balance (including private loan debt) could reach as high as $41,618.
Another troubling trend is this: Nearly one-third (29%) of student loan debt holders say their debt has kept them from homeownership, according to separate research from the Education Data Initiative. Almost three-quarters (72%) of student debt holders who don’t own homes say they believe student loan debt will delay homeownership.
Here are some other highlights from the study:
- 37% of first-time homebuyers have student loan debt.
- First-time homebuyers with student loan debt spend an average of 39% less on their homes than buyers without student debt.
- 39% of Generation Z said their student loan debt is delaying them from owning a home.
- 60% of millennials said student loan debt postponed them from buying a home.
- 53% of Generation X said student loan debt is delaying them from owning a home.
- 37% of baby boomers said student debt postponed them from buying a home.
Student loan borrowers face two main barriers to homeownership. One is that they can’t afford to save for a down payment while paying off student loans. The other is that they can’t qualify for a mortgage loan with student debt weighing on their credit scores.
But there are some steps they can take to overcome these hurdles. A couple involves life events such as getting married and having children, both of which improve your chances of homeownership, the Education Data Initiative found.
Holding a steady job also makes it easier to qualify for homeownership. Here are some other ways to improve your chances of owning a home:
- Make your student loan payments in full and on time every pay period. Missing payments will lower your credit score and make it harder to qualify for a mortgage.
- Cut spending on non-essential items so you have more money available to pay down student loan debt. Whenever possible, pay more than the minimum on your student loans to help you pay them off faster and improve your chances of qualifying for a mortgage loan.
- Research programs designed to help student loan borrowers attain homeownership. Among the programs cited by the Education Data Initiative are the Maryland Mortgage Program, Ohio Grants For Grads Program and Rhode Island Ocean State Grad Grant Program.
- Seek employment with companies that help their workers pay off student loans. In a 2024 report, U.S. News cited 15 companies, including Aetna, Ally Financial, Estee Lauder, Google, Nvidia and SoFi. Again, paying off your loans faster will speed the process of qualifying for homeownership.
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