Similarly, the White House also strongly refutes any comparison between the housing market bubble and student debt. “Student debt is less likely to make a recession more severe or slow an expansion in the way that mortgage debt may have,” the paper says.
For that, it cites several factors.
For one, student debt is still low as a share of Americans’ disposable income. In 2015, student debt made up 9% of aggregate income, up from 3% in 2003. By comparison, mortgage debt at its peak in 2007 comprised 84% of aggregate income, up 25 percentage points in five years, the report states. Mortgage debt dropped back down to 61% in 2015.
Secondly, the White House says, “student loan debt is an investment in human capital that typically pays off through higher lifetime earnings and increase productivity.” (Source)