Federal Reserve Bank of New York President William Dudley said that the rising burden of student debt is weighing on interest rates in the U.S., and it would be a “reasonable conversation” for policy makers to explore making college tuition free, Bloomberg News reported. The growing pile of student debt is “obviously one headwind to economic activity” that “probably pushes in that direction of lower equilibrium real rates” because it limits households’ spending power, Dudley said yesterday. Dudley and his staff presented data showing significant disparities in homeownership between those who graduated from college with debt and those who graduated without it. In 2016, almost half of all 30-year-olds who left college with debt between 2006 and 2011 had missed at least one of their required monthly payments, according to the New York Fed researchers. Nearly a third of them had defaulted, meaning they missed nine straight months of payments. Read more.
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