The class of 2008 is the most likely to buy and mortgage a higher-priced home, according to recent data from LendEDU, a student loan debt consolidation company based in New Jersey. With the highest median credit score in the last 10 years, this group of young adults also boasts the highest median home loan debt, at $395,038.
According to the data, 2008 graduates outpace other classes in home loan debt by more than $115,000. The classes with the next-highest home loan debts are: 2013, with $279,300; 2016, with $274,384; 2009, with $260,008; and 2014, with $249,100.
Classes with the lowest home loan debt were 2010, 2011, and 2015—all of which saw a median debt of $200,000 or below. These results were unexpected, according to LendEDU.
“While we expected to see graduates of earlier class years borrowing more home loans,” the report stated, “we instead see a trend indicative of the housing market over time—a peak in 2008 followed by a large recession and tentative recovery starting in 2012.”
The report also breaks down home loan debts by college degree and, according to the data, graduates with a Master of Business Administration (MBA) have the highest median home loan debt at $445,900. This is followed by Doctor of Pharmacy ($387,625), Juris Doctor ($323,000), Doctor of Philosophy ($262,200), Masters ($260,008), Bachelors ($200,111), and Associates ($164,225).
LendEDU’s data shows all groups but Associate-degree graduates have at least a good or very good credit score. Something that could indicate the true value of a higher degree.
The report explained, “After the recession hit and a college degree no longer guaranteed a job, many began to wonder: what’s the real value of a college education? With some patience, perhaps a good credit score.”
Ultimately, it seems higher education, over time, leads to higher credit scores and therefore larger mortgage loans and higher debts. This means that while this year’s class is currently on track for the poorest credit scores in recent memory, that doesn’t indicate they’ll be unable to secure a home in the not-too-distant future.
“In general, higher degrees do equate with higher credit scores and bigger home and auto loans,” LendEDU stated. “Students who graduated longer ago have better credit scores and bigger loans than current students. The class of 2017 has the poorest scores, but if the trend holds, they’ll be back up into the ‘good’ zone soon enough.”