The fact that the student loan debt industry has topped $1 trillion is common knowledge these days, but what many people don’t know is that this epidemic is starting to spread to other parts of the economy. The nearest target: the mortgage lending industry.
Borrow, Not Borrow
The student loan debt burden is moving like wildfire into other territories. Economic experts are growing increasingly concerned over the threat student loan debt is beginning to have on the mortgage lending and housing industries. States are reporting significant drops in first time home buyer applications, some as much as 10% in the last year.
With fewer young adults are qualifying or getting approved for new mortgage loans we could see further reductions in the mortgage lending industry. If that happens, rates are likely to go up and we could see another housing bubble under poor loan terms yet again or, at the very least, see the rate of foreclosure creep back up. In either case, it is these new facts coming to light that have many in Washington beginning to push for change in student loan lending.