WASHINGTON – Today President Joe Biden announced his plan to deliver student loan forgiveness of up to $20,000 to millions of Americans. “This is one of the most consequential administrative actions for housing in a generation,” said NHC president and CEO David Dworkin. “Student loan debt burden is a major impediment to first-time homebuyers. This decision will make homeownership more attainable for millions of low-, moderate- and middle-income Millennials, Gen Zs, and people of color.”
According to a study conducted by the National Association of REALTORS®, “nearly half of student loan debt holders say debt is delaying them from buying a home because they can’t save for a down payment (47%) and don’t think they qualify for a mortgage (45%).” A recent Federal Reserve study showed student loan debt has severe ramifications on access to homeownership, reducing the homeownership rate by 1-2 percentage points for a $1000 increase in student debt.
“Forgiving $20,000 in student loans for Pell Grant recipients will have a material impact on these borrowers’ creditworthiness and ability to qualify for better mortgage interest rates. It will also reduce their debt burden, making it easier to buy an affordable home,” said Dworkin.
Student loan forgiveness for Pell Grant recipients will significantly impact borrowers of color. In a report by the National Center for Education Statistics, 72% of Pell Grant recipients were Black. Black homeownership has plummeted since the 2008 housing crisis, falling to levels not seen since the Fair Housing Act was passed in 1968. In response, NHC joined the National Urban League, National Fair Housing Alliance, National Association of REALTORS®, Mortgage Bankers Association, National Association of Real Estate Brokers and the NAACP (with research by the Urban Institute) to create the Black Homeownership Collaborative and its 3by30 initiative. Addressing student debt burden is one of the policy recommendations identified by the Black Homeownership Collaborative.
The National Housing Conference has been defending our American Home since 1931. #OurAmericanHome @natlhousingconf @davidmdworkin #studentloanforgiveness
About NHC: The National Housing Conference is a diverse continuum of affordable housing stakeholders that convene and collaborate through dialogue, advocacy, research, and education, to develop equitable solutions that serve our common interest – an America where everyone is able to live in a quality, affordable home in a thriving community. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.