According to recent data from the Federal Reserve Bank of New York, college degree attainment is closely linked to homeownership—despite the effects of student loan debt.
Rajashri Chakrabarti, a senior economist in the Federal Reserve Bank of New York's Microeconomic Studied Function, says the data make it clear: "Graduation matters a lot."
The data show:
- About 50% of college grads who accrue student loan debt own homes;
- About 40% of non-college grads who did not accrue student loan debt own homes;
- About 45% of bachelor's degree holders with student loan debt own homes;
- About 40% of associate degree holders without student loan debt own homes; and
- 25% to 30% of those who did not attend college own homes.
Even if you take on student debt in the process, obtaining a college degree leaves you better off financially than the completely debt-free population of people without degrees, Chakrabarti explains.
For many students, enrollment decisions are based more on ROI than personal fit
Andrew Hanson, a senior analyst at the Georgetown University Center on Education and the Workforce, adds that it's important to consider other factors that play into homeownership as well, such as labor market value and how long it takes to fully launch a career after graduation.
"In terms of this issue... it's all about getting [graduates] into good jobs... and to do that, you have to have completion with labor market value," says Hanson.
According to Hanson, it now takes longer for graduates to launch their careers—that is, reach the average wage for their field of study—than it did in the past. Because of this lag, Hanson says many graduates are not buying homes until their late 30s.
So while college graduates—even the ones carrying around student debt—are doing better than their non-degree counterparts, it's taking them a longer time to get there than in the past (Abdul-Alim, Diverse Issues in Higher Education, 4/4).
It could be time to go beyond the traditional career services model
Next in Today's Briefing
5 reasons—other than cost—that students don't graduate