<p>We should keep in mind that in the early 90’s, people were still expected to put a lot of their own money into the purchase price of a home. A minimum of 20% down was not unusual and less than 10% down was rare. It was only when the mortgage industry went insane that we saw people buying homes while putting no money down. </p>
<p>I wouldn’t be surprised if the parents of the 30ish teachers in NYC had to wait a long time to come up with enough money to afford to buy their house. My wife and I certainly did. I think that what’s happened in the mortgage business shows that it is a good thing for the country to require a substantial downpayment.</p>
<p>As for the student loans, I’ve told our daughter, who is a HS senior, that if she accumulates a lot of debt, whether by student loans or credit cards, it will impact on her ability to buy a house.</p>
<p>I’ve tried to get her to understand how it seems to me that when the governments make more money available for education, the colleges raise their tuition and pay more money for administrators. So the middle class does not seem to have been/ helped by the system. I suspect that if the government funding is reduced, the costs of college would become more affordable. The college bubble reminds me a lot of the real estate bubble before it collapsed.</p>
<p>My daughter asked why the Occupy Wall Street group doesn’t focus on the colleges and the politicians. That is an excellent question.</p>