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Under heavy loan burdens, young entrepreneurs are investing low on Buisness.
The share of 25-year-olds with student debt increased to 43 percent last year from 25 percent in 2003. The average education-loan balance among that age group grew by 91 percent over the period, to $20,326 from $10,649, according to the Federal Reserve Bank of New York. Those balances, which now exceed credit-card debt, are impeding young adults under age 30 from buying homes and cars, according to an April blog post on the bank’s website.
Student debt can also suppress risk-taking and innovation by discouraging the formation of new businesses, the federal government’s Consumer Financial Protection Bureau said in a report released May 8.
“For many young entrepreneurs, it is critical to invest capital to develop ideas, market products, and hire employees,” the CFPB said in its report. “Student debt burdens require these individuals to divert cash away from their businesses so they can make monthly student loan payments.”
The share of 25-year-olds with student debt increased to 43 percent last year from 25 percent in 2003. The average education-loan balance among that age group grew by 91 percent over the period, to $20,326 from $10,649, according to the Federal Reserve Bank of New York. Those balances, which now exceed credit-card debt, are impeding young adults under age 30 from buying homes and cars, according to an April blog post on the bank’s website.
Student debt can also suppress risk-taking and innovation by discouraging the formation of new businesses, the federal government’s Consumer Financial Protection Bureau said in a report released May 8.
“For many young entrepreneurs, it is critical to invest capital to develop ideas, market products, and hire employees,” the CFPB said in its report. “Student debt burdens require these individuals to divert cash away from their businesses so they can make monthly student loan payments.”
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