More Student Debts = Less Other Debts

Part III of the 24-page Power Point report put out by New York Fed on Feb. 28, 2013 focuses on age group 25-30. here are some notes I took:

Page 17

Listed are the other loans, such as auto, credit card, mortgage, heloc loans, taken by people in the 25-30 age group, with different amount student loan balances.

It is kind of interest, regardless how much student loans people take,  they all owe an average of around $20,000 on other things.

Page 18

Shows the percentage of borrowers age 25-30 years old with new mortgage origination. Notice people with $100K student debt are the ones most active in assuming mortgages.  These are brave souls!

On other hand, people with some student loan balances are the more likely to take mortgages.  So one should take some student loan after all?

Shop until you drop!  The saying manifests here as people who delinquent on student debt has very little mortgage origination, true in 2005, true in 2012.

Page 19

“Delinquent student loan borrowers are very likely to be delinquent on other debt as well.”

Delinquency is a habit?

Page 20


  • Young borrowers reduced their debt from 2005 to 2012, but the reductions were more pronounced among borrowers with high  student loan balances, likely reflecting declines in demand and access to credit.
  • High levels of student debt delinquency reduces young borrowers’ ability to secure other types of credit.
  • Student loan delinquency is also associated with higher delinquency rates on other types of debt.
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