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Cited by 110Housing Market and EconomicsFinancial Literacy, Pension, Retirement AnalysisHigher Education Research Studies

Student Loans and Homeownership

Open access
Mezza, Alvaro, Ringo, Daniel, Sherlund, Shane, Sommer, Kamila·2020·Journal of Labor Economics
DOI 10.1086/704609
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Abstract

We estimate the effect of student loan debt on subsequent homeownership in a uniquely constructed administrative data set 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 1.8 percentage points for public 4-year college-goers during their mid-20s, equivalent to an average delay of about 4 months in attaining homeownership. Validity tests suggest the results are not confounded by local economic conditions or changes in educational outcomes.

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Cites

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  • Higher student loan debt reduces homeownership by approximately 1.8 percentage points per $1000 in additional debt.

    “Mezza et al. (2020) use a national credit report database to find substantial reductions in homeownership for those with higher loans, of approximately 1.8 percentage points per $1000 in additional debt.”

    From College Costs, Financial Aid, and Student Decisions (2022) · cites this paper as Mezza et al. (2020)

    Section 3 (Data) confirms that the study used nationally representative credit-bureau records. The Introduction and Conclusions report a 1–2 percentage-point drop per additional $1,000 of debt, so 1.8 falls within the reported range. But the paper's headline estimate is about 1.5 points, and the finding concerns borrowers in their mid-twenties, not homeownership generally. (LLM, conf=0.84)

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Cites

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Research works printed but not linked: 3

  1. Kuipers, P. and C. Wise, "Are Student Loans Hurting Millenials?" The RMA Journal, 2016.
  2. Loewenstein, G. and R. Thaler, "Anomalies and intertemporal choice," Journal of Economic Perspectives, 3:181-193, 1989.
  3. Mezza, A. and K. Sommer, "A Trillion-Dollar Question: What Predicts Student Loan Delin- quencies?" Journal of Student Financial Aid, 46:16-54, 2016.

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Related

Authors
Mezza, A., Ringo, D., Sherlund, S., & Sommer, K.
Affiliations
Federal Reserve Board of Governors (US)
ORCID
Venue
Journal of Labor Economics
Publisher
University of Chicago Press
Published
2020-01
Volume
38
Issue
1
Pages
215-260
ISSN
  • 0734-306X (ISSN-L)
  • 1537-5307
DOI
10.1086/704609
OpenAlex
W3125830129
Cited by
110
References
16
Citations by year
2026: 14 · 2025: 23 · 2024: 22 · 2023: 14 · 2022: 16 · 2021: 6 · 2020: 11 · 2019: 3 · 2018: 1
FWCI
11.25
Type
journal article
Language
en
Open access
Licence
public-domain
Locations
  • Journal of Labor Economics (publishedVersion, public-domain)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Housing Market and Economics
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy, Pension, Retirement Analysis
  • Social Sciences › Education › Higher Education Research Studies
Keywords
student debt, homeownership, in-state tuition, household finance, educational outcomes

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