Student Debt and Housing Crisis

High on Debt, Low on Housing
“Student debt levels have hit $1.5 trillion,” says author Steven Greenhut on the Orange County Register. As it is, college students are dealing with enormous levels of debt atop which Orange County’s housing crisis has prevented students from finding affordable housing near campus. During an interview, Annie Lee, a student at UC Irvine pursuing her doctorate in biology, claims that house hunting has become more of a ‘task’ because of how hectic it can be to settle for a house as a recent graduate with debt lagging behind from her bachelor’s degree.

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The housing market in Orange County is expected to see a rise in property values, thereby making the demand for houses exceed the supply. California’s population growth doesn’t coordinate well with the supply and demand for houses, which adversely impact younger generations. However, a possible solution for this would be to either wait out the period of peaked housing prices through home-sharing by renting a single apartment with other college grads or renting with a retiree.
The transcending businesses and growing population in Orange County are creating a rise in the demand for recent graduates seeking jobs. But due to the inflated price listings, it has become almost impossible for students to live independently after graduation. According to Zillow, rent is exceeding $3,000 on average per month and housing is averaging $726,200 in Orange County, just for two-bedroom apartments and 3 beds 2 baths for housing, respectively.
This is becoming a problem because a handful of these college graduates come from low-income family backgrounds. Families that belong to the middle class and make just above the margin are also struggling because the college financial aid system disables them from receiving any sort of financial assistance other than scholarships. The whole purpose for them to obtain a degree is to eventually support their families by getting a financially stable job, but the extreme house prices are preventing them from fulfilling their goals and paying their debt in time.
For instance, in the article “OC One of the Least Affordable Places to Live in the U.S.: Annual Community Indicators Report,” Kassidy Dillon explains how graduates from colleges within Orange County are simply unable to compete with the rise in prices. After having taken a survey on housing by OC Register, 40% of the people that took it claimed to have been homeless at some point due to the drastic accumulation of loans from education. Almost over 10% of the United States’ debt comprises of student loans, and college policies and their connections to the federal government holds responsible for this. Colleges in the Orange County area do provide financial aid and grants to such students, but there are restrictions and limitations for how much they can assist students with, without going into loss themselves.The article also explains that the idea of having loan forgiveness sounds compelling, but doing so would result in two times as much as the nation’s current debt in student loans. So ultimately, those that come from lower-income families will continue to have the most trouble of consistently paying their dues.
The student debt along with the housing crisis in Orange County has impacted individuals and societies in ways that have led to the dysfunctionalities of lives individually and the economy as a whole. According to an article by Rob Wile on splinternews.com, “Student debt has turned millennials into carless, homeless, basement dwellers who can’t borrow,”banks have become a lot more dramatic when it comes to giving student loans. Statistics on this website also show that students and consumers with higher educational debts are limited to options in the vehicle and housing markets, specifically, despite their incomes and earning potentials being high. Given that millions of students rely on student loans to help earn their degree which results in the pile of millions of dollars of debt, recent college grads wanting to become homeowners in Orange County could be restrained from obtaining a mortgage because of the enormous amounts of debt holding them back. This problem needs to be solved to prevent the levels of homelessness from increasing. German M, a student who attended the Art Institute of California in Orange County, confessed on higherednotdebt.org that his college used ‘deceptive recruitment tactics to snare hundreds of thousands of students into suffocating and never-ending debt for a degree no one will recognize’. He claimed that the tactic they used was part of their ‘business plan’ and would be used in exaggerating and showing off their job placement success; so the college was least concerned about whether the students would be able to settle down well after obtaining a general degree. It could also be a problem for the economy as a whole because if fewer people are buying homes, then fewer people will approach banks to take out mortgages which, in the long term, would impact the source of a bank’s revenue. They are not only slowing down the expansion of new businesses for the long term because graduates are unable to take up extra loans to start them, but are also delaying homeownership because graduates are expected to eventually purchase a house further in life due to overwhelming student loans in the present.
Student debt is the root of all problems dealing with the economy, majorly including the housing crisis. Several solutions have been thought upon for this issue in Orange County, such as living with parents or renting an apartment with friends or room-mates. But according to the OC Register, one of them, in particular, was legitimate and most efficient when implemented: Living with a retiree. The article by Felicia Mello on OC Register, “A new solution to the student housing crisis: retiree roommates?” talks about a reliable upcoming plan proposed by the University of California Campuses. UCs have developed a new home-sharing plan where graduate students, looking for a home, can live with retirees that have available space. UC Berkeley claims to have predicted a positive impact on both the student and the retiree, as they can both be in each other’s company. Nowadays, since people are living longer and are retiring in their late years, their friends and, if at all, family may move on or die, those seniors are left more isolated. So, sharing homes with a student could give them a sense of family and community. Through this program, students will be paying way below the market value for renting in Orange County, which would be less than or equal to $1000 on a monthly basis. The intention behind this is about ‘building a relationship, and the support grows out naturally from that relationship,’ says Mello. According to cnbc.com, As a community, we can only protest and stand together to help develop the proper resources for students to be successful graduates and, ultimately, well settled. From the student’s side, we will need to perform intensive research and seek help from career pathway guidance counselors on different methodologies we can develop and use to help ourselves to get the financial assistance we need. And although the housing crisis has no viable solution, the government can try to prevent student loan debt and housing crisis by investing more money in educational enrichment programs for students and should also include an allocation of billions of dollars to for informing and educating young students about the different risks and rewards associated with college fees, and also provide them with the tools to make informed decisions about their education and future employment.
California’s population will continue to rise, which might adversely impact younger generations through housing and increased amounts of debt. The most feasible solution developed by the University of California is intended to benefit both retirees and students. This problem needs to be tackled urgently to prevent increased homelessness from recurring in Orange County. Also, the pile up of student debts could result in other hazardous factors dealing with mental and physical health. As a community, we could all work together to research, share, develop, and inform students around us of the different opportunities for financial assistance to prevent major debts and housing crises.
Works Cited
1. Greenhut, Steven. “Plans for Free Tuition Punish Hard Work, Drive up Debt.” ​Orange County Register​, Orange County Register, 10 May 2019, https://www.ocregister.com/2019/05/10/plans-for-free-tuition-punish-hard-work-drive-up-debt/.
2. Zillow​, https://www.zillow.com/orange-county-ca/home-values/.
3. Wood, Tracy. “OC One of Least Affordable Places to Live in U.S.: Annual Community Indicators Report.” ​Voice of OC​, 13 Aug. 2018, https://voiceofoc.org/2018/08/oc-one-of-least-affordable-places-to-live-in-u-s-annual-co mmunity-indicators-report/.
4. Wile, Rob. “Student Debt Has Turned Millennials into Carless, Homeless, Basement Dwellers Who Can’t Borrow.” ​Splinter​, Splinter, 24 July 2017, https://splinternews.com/student-debt-has-turned-millennials-into-carless-homel-1793845 475.
5. “In Their Own Words: Student Debt Stories from Californians.” ​Higher Ed, Not Debt​, 19 Sept. 2018, https://higherednotdebt.org/fact-sheets/in-their-own-words-student-debt-stories-from-cali fornians.
6. Mello, Felicia. “A New Solution to the Student Housing Crisis: Retiree Roommates?” Orange County Register​, Orange County Register, 11 Feb. 2019, https://www.ocregister.com/2019/02/11/a-new-solution-to-the-student-housing-crisis-reti ree-roommates/.
7. Nick Ducoff, CEO and founder of Edmit. “Students and Their Families Need Support Systems before They’re Saddled with College Debt.” ​CNBC​, CNBC, 17 May 2019, https://www.cnbc.com/2019/05/16/students-families-need-support-systems-to-handle-coll ege-debt-crisis.html.