Date of Conferral

2021

Degree

Ph.D.

School

Management

Advisor

David Bouvin

Abstract

Student loan debt has increased significantly over the past several years. At the same time, there has been a historic drop in first-time home buyers. What remains uncertain is if these two trends are related. The purpose of this quantitative study was to determine the relationship between student loan debt and home ownership for young adults in the United States. The theoretical foundation focused on consumer behavior through Maslow’s motivation-need theory. Individual-level longitudinal data from the National Longitudinal Survey of Youth 1997 was used to examine more than 3,000 participants’ responses regarding their student loan debt and home ownership status, mortgage status, and amount of mortgage debt. For each outcome, ordinary least squares models were estimated, and outcomes were regressed on respondent-reported total educational debt and a set of control variables associated with both educational debt and homeownership. Results indicated that homeownership and mortgage status, though significant, had a relatively small inverse association with educational debt. This small association does not support the empirical claim of educational debt being a major factor in the decline of first-time home buyers. However, the analysis between educational debt and mortgage amount revealed a significant and somewhat larger inverse relationship, indicating that even though student debt may not be a major factor in deterring homeownership, it may lead young adults to purchase less expensive homes and thus less mortgage debt. Multiple business sectors, the government, and individual consumers can benefit from this study through a better understanding of the financial needs of those students with student loan debt.

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