Research finds a weak causal relationship between student loan debt and homeownership. Still, less access to generational wealth among young Black adults is a root cause of higher student debt burden and a substantial barrier to accessing homeownership. The inability to repay debt, or to build wealth through homeownership, in turn, contributes to the persistence and widening of the racial wealth gap.
This report from the Urban Institute describes policy efforts to mitigate the effects of student loan debt on mortgage lending and homeownership, as well as the impact they have on closing the racial homeownership gap. These efforts include flexibility in treatment of student loan debt for mortgage lending, merging student loans into mortgage debt, and state programs to subsidize borrowers’ down payments.