\n<\/p>\n
The housing<\/a> crisis may also have sparked the increase in student loan<\/a> default rates, according to a working paper by the National Bureau of Economic Research.\u00a0<\/p>\n\n Read more<\/strong>: Student Debt Delays Buyers By 5 Years<\/span><\/p>\n<\/blockquote>\n\n The study says the drop in home prices during the Great Recession also coincided with a 24 to 32 percent rise in student loan<\/a> default rates. Researchers looked at administrative student loan data along with ZIP code home price<\/a> data for about 300,000 student loan borrowers in repayment during the recession.<\/p>\n\n Last year, more than 1 million federal student loan borrowers defaulted on their debt.<\/p>\n\n \u201cThe huge rise in student loan defaults is on everybody\u2019s minds and the question is what\u2019s the cause of this rise?\u201d says Holger Mueller, one of the authors of the paper and a professor of finance at New York University\u2019s Stern School of Business. \u201cWhat we want to do is point to another very important source of default risk and that\u2019s just the labor market.\u201d<\/p>\n\n Researchers point to the impact falling home prices may have had on an area\u2019s labor market. When the value of homes drop, homeowners tend to spend less. Local businesses then are often forced to keep workers\u2019 pay stagnant or even lay them off.\u00a0That ripple effect may have also contributed to the higher student loan default rates.\u00a0<\/p>\n\n Source: \u201cWhy Lower Prices Lead<\/a> to Higher Student Loan Default Rates,\u201d MarketWatch (April 1, 2017)<\/em><\/p>\n<\/div>\n \n \n<\/pre>\n\n<\/div>\n\n\n\n
[ad_2]\n
link <\/a>\n<\/p>\n","protected":false},"excerpt":{"rendered":"