[ChainsawSurgery]

> student-debt problem is so severe that it seems to be reducing the formation of new households

Perfect! Housing bubble averted.

In all seriousness, this + an influx of foreign investment into american real estate + a future generational aversion to debt (from experiencing first or secondhand how crippling student loan debt can be) will make for some interesting times in the upcoming decades.

[Shivetya]

the aversion to debt isn't occurring very fast considering that outstanding auto load debt is around 886 billion dollars. Credit card debt in 2014 was very similar, with an average of 7k per household.

when it comes to school debt the Federal government would be best served by limiting what it loans based on the education desired, as they set limits on what they pay out for medical services there is little reason to not do the same for education. It might even help reign in the ever increasing costs that colleges charge which in itself a property of easy loans

[ChainsawSurgery]

> the aversion to debt isn't occurring very fast considering that outstanding auto load debt is around 886 billion dollars. Credit card debt in 2014 was very similar, with an average of 7k per household.

I can't pull up that data right now, but I remember reading (on here, no less) that most of that auto debt could be attributed to non-millenials.

Credit card debt is an excellent point, though I'm not sure how meaningful per household is in this context (part of the article is pointing out that a decent portion of millenials aren't forming their own households).

Remember that the oldest millenials are still in their early-mid thirties.

> Federal government would be best served

Ah, but there's the rub - a decent amount of this debt is private.

[mikeash]

$886 billion in auto loans doesn't seem like very much to me. There are about 254 million passenger vehicles in the US, so that's an average of $3,500 in debt per car (of course there will be huge variation there).

You pretty much need a car to live in many places in this country, and in many more places you need a car to have a decent job. Most people can't afford to buy one outright, and in a case like that, it's sensible to take out a loan in order to purchase an asset that allows you to immediately start making money to pay it off. Taking out a loan for a low-end car so you can drive to work is pretty different from taking out $50,000 in loans for a degree that you hope will let you find better work years in the future.

[awesome_work_]

I agree with mikeash, and wanted to just add my own personal experience.

Most people I know, and what I also do personally, is buy a used car for less than $10k, and pay it off within 3 years. Then you live with it until it no longer becomes economically viable to keep it.

So my wife and I own our cars at this point, which frees $400+ a month we can put towards something else with the understanding in 2-3 years we will need to budget for cars again.

The basic cycle is 3 years of car debt, 3 years without.

(I don't live in an area which has public transportation)