Graduates of four-year colleges who took out student loans are estimated to spend more than a decade saving up for a 20% down payment on their very own home, according to a recent report. That’s nearly double the 5.3 years it is expected to take those lucky grads who didn’t have to take out loans to fund their education, according to an Apartment List report. The reason? The debt-free grads can save more, to the tune of an average $350 a month, than those paying off those odious loans. They’re also more likely to have family and friends who can chip in for the costs of buying a home.
“At least part of this is by choice,” says Apartment List data scientist Andrew Woo. “College-educated millennials with student loans could be saving more, but in many cases are choosing not to do so. They spend more on rent. They spend more on other expenses, which include travel, dining out, and shopping.”
More than half of college-educated millennials surveyed had student debt that resulted in a $410 average monthly bill. But before throwing them a pity party, keep in mind that they also earn about $22,600 more annually than those who don’t have those degrees gracing their resumes.
Renters without four-degrees are estimated to spend 15.4 years (!!) saving up for that 20% down payment.
The first hurdle for these higher education dropouts? They’re socking away an average of only $160 a month for arguably the biggest purchase of their lives. The second? They tend to receive less financial help from family and friends.
This makes buying in most major cities across the country next to impossible for many of these college dropouts, according to the report. They’re relegated to cities where it will take them less time to come up with a down payment, like Atlanta; Philadelphia; Kansas City, MO; and Detroit.
“Graduates without debt can pretty much afford to live anywhere,” Woo says. “Graduates with student loans can afford to live in most places except the West Coast and cities in the Northeast like New York, Boston, and Washington, DC.”