Student loans were supposed to help people get ahead. But for many, they’ve turned into a lifelong burden. Millions of Americans are still paying off their college education long after they’ve graduated. And while they’re focused on making monthly payments, other goals—like buying a home—get pushed further and further out of reach.
Homeownership is one of the biggest ways people in this country build wealth. It offers stability, a place to raise a family, and long-term financial security. But for borrowers stuck with high monthly payments and growing interest, owning a home can feel impossible. Canceling student debt could change that. It could give people a fair shot at finally buying a place of their own.
How Student Loans Get in the Way of Buying a Home
Paying off student loans takes a big chunk out of your income. If you’re spending $300 or $400 every month just to cover your loan, that’s money you can’t save for a down payment. It also means you’re not setting anything aside for closing costs, moving expenses, or even furniture.
Buying a home takes more than just good intentions. You need:
- Enough savings for a down payment (even 5% on a $250,000 home is $12,500)
- Money for closing costs (usually 2% to 5% of the home price)
- An emergency fund to cover things like repairs, job changes, or health issues
Most people with student loans are just trying to stay current on their bills. Saving thousands on top of that is extremely difficult, especially if rent is already high where they live. What ends up happening is simple: they keep renting, often for years longer than they want to.
How Student Debt Affects Your Mortgage Application
Even if someone manages to save a little, student loans can still hold them back when they apply for a mortgage. That’s because lenders look closely at your debt-to-income ratio—basically, how much of your income is already going toward debt each month.
Here’s a simple example: Let’s say you earn $4,000 a month and pay $500 toward student loans. That’s already 12.5% of your income going to debt. Add in credit cards or a car payment, and you might be close to—or over—the limit that banks are comfortable with. Most lenders want your total debt to be under 36% of your income.
Even if you’ve never missed a payment and your credit score is fine, your loan balances make you look risky. Some borrowers only qualify for smaller mortgage amounts. Others get turned down altogether. It doesn’t feel fair, but it’s how the system works.
What Student Debt Does to Your Monthly Budget
The bigger picture is that student loans make people live differently. When you’re paying hundreds of dollars a month on loans, you don’t have much wiggle room. Everything from saving for retirement to planning a vacation becomes harder.
You start making choices that aren’t ideal, but feel necessary. For example:
- You keep putting off saving for a home
- You stick with a job you don’t love because it pays the bills
- You avoid big decisions like having kids or getting married
- You skip investing or building credit, just to play it safe
It’s not just about money—it’s about stress. Living under that pressure every month can make people feel like they’ll never get ahead. Canceling student debt wouldn’t solve every problem, but it would give people breathing room. And with that extra space in their budget, homeownership would finally be a real option.
Why Delaying Homeownership Hurts More Than You Think
Most people know that owning a home helps you build wealth. But what’s not talked about enough is how much you lose when you can’t get in early. Every year someone delays buying a home is a year they don’t build equity. And once they finally do buy, the prices may have gone up, interest rates might be higher, and they’ve missed out on years of appreciation.
Homeownership does more than provide a place to live—it helps families grow financially. Owners:
- Build equity that they can borrow against or use in retirement
- Pay property taxes that support local schools and services
- Invest in home upgrades that increase property value
- Stay longer in one place, which helps communities feel more stable
When people delay home buying because of student loans, the whole system slows down. Builders stop building entry-level homes. Local governments collect less in property taxes. Communities become more expensive and harder to enter. Canceling debt could open the door for more buyers—and give the market the push it needs.
Who’s Hurt the Most by Student Debt
Not everyone experiences student debt the same way. Some groups face bigger obstacles, both with their loans and with homeownership.
Black borrowers tend to take on more student debt and repay it more slowly. That’s not just about individual decisions—it’s about income gaps, fewer family resources, and unfair systems. According to Brookings, Black college grads owe about $25,000 more than White grads just a few years after finishing school.
Latino borrowers, especially first-generation college students, often have less financial support from their families. That means they borrow more, and they may earn less after graduation, making repayment harder.
Women hold about two-thirds of all student loan debt. Even with the same degrees as men, they’re often paid less in the workplace. That slows down repayment and makes it harder to qualify for a mortgage.
All of these borrowers face hurdles just to stay afloat. Asking them to also save for a home and get approved for a mortgage—while still repaying student debt—makes the goal of owning a home feel nearly impossible. Canceling student loans could help fix that imbalance and bring more people into the housing market.
What the Market Shows Us About First-Time Buyers
If you look at the numbers, it’s clear that something is off. Fewer young adults are buying homes, and it’s not because they’re not interested. Surveys show that most millennials and Gen Z still want to own a home. They just don’t think they can afford it.
The average age of a first-time homebuyer is now 36. Twenty years ago, it was 30. That gap matters. People are missing out on years of equity, appreciation, and financial growth. Student debt is a big part of the reason. Wages haven’t kept up with housing costs or tuition, and debt loads have increased.
At the same time, the housing market has gotten more competitive. In many cities, homes sell fast and over asking price. A buyer with student debt and a smaller down payment often loses out to someone with fewer financial obligations. Canceling that debt would give borrowers a fighting chance to participate in the market.
What We’ve Learned from Forgiveness Programs
We already know what happens when people have their loans canceled—they move forward. The Public Service Loan Forgiveness (PSLF) program has helped hundreds of thousands of people erase their debt. Afterward, many say they finally feel able to save, buy a home, or invest in their future.
In some cities and states, local governments offer both loan relief and homebuyer programs. When they work together, the results are powerful. People can clear their debt and get help with down payments or mortgage approval.
Even small changes help. When payments are paused or reduced through income-driven plans, many borrowers use that relief to catch up financially. Now, imagine what could happen if the debt disappeared completely. The difference would be even bigger—and more permanent.
What Policy Could Do If It Treated Debt and Housing Together
Some new policy ideas are starting to connect the dots between student debt and homeownership. One example is a bill that would give first-time homebuyers who have student loans a $25,000 grant. That could go toward a down payment or closing costs—two of the biggest hurdles for renters trying to become owners.
Other proposals suggest updating the way lenders calculate loan payments in mortgage applications. Right now, even if you’re on a low monthly repayment plan, some lenders use a higher estimated payment when looking at your debt. That inflates your debt-to-income ratio and makes you look riskier than you are.
These aren’t radical ideas. They’re realistic changes that reflect what borrowers are dealing with. If policymakers treat student debt as more than just a loan problem—and start seeing it as a housing issue too—more people will finally get the chance to buy a home.
How Life Changes When Loans Disappear
When student loans go away, people’s lives change almost overnight. That monthly payment is no longer hanging over them. They can breathe a little. They can save. They can start planning.
Many borrowers use that extra room in their budget to:
- Build an emergency fund
- Increase their credit score
- Start saving for a home
- Apply for a mortgage they couldn’t qualify for before
It’s not just about money—it’s about confidence. Debt makes people feel stuck. Canceling it makes people feel like they can move forward again. For many, homeownership becomes part of that next step.
What Young People Say About Homeownership
Most young adults still want to own a home. They talk about it all the time. But they also say it feels impossible. The rent is high, the market is competitive, and their loans won’t go away. They don’t feel like they’re falling behind because of bad choices. They feel like they’re doing everything right, but the numbers still don’t add up.
If student debt were no longer a factor, many of these young people would jump at the chance to buy. They just need a fair shot. Right now, they’re trying to get ahead with one hand tied behind their back. Taking that weight off would change everything.
Why It’s Good for Everyone If More People Own Homes
When more people buy homes, it’s not just good for them—it helps the whole economy. Homeowners put money into their communities. They pay property taxes. They shop locally. They invest in their homes and neighborhoods.
Owning a home also builds wealth. That wealth can be used to send kids to college, support small businesses, or retire with dignity. Right now, people without family help or high incomes are locked out of that opportunity. And much of the time, student loans are the reason why.
Canceling those loans isn’t just about helping individual borrowers—it’s about strengthening the middle class and building a more stable future for everyone.
Conclusion
Student debt has quietly become one of the biggest reasons people can’t buy homes. It eats up income, raises debt ratios, and makes it harder to save. But it doesn’t have to stay that way.
Canceling student loans would make homeownership more realistic for millions of people. It would allow them to save, qualify for a mortgage, and finally start building equity. It would strengthen families, neighborhoods, and the economy as a whole.
This isn’t just about clearing a balance. It’s about giving people a fair shot at something that should be within reach: owning a home and building a future they can count on.