Amanda Tappan, 21, tries her best to save money. She shares an apartment with four roommates, pays off her credit card each month, and drives between odd jobs in her used Chevy Cavalier.
But when she graduates next month from the University of South Florida, she won't be spending that money, or her early career wages, on buying a home. Instead, that money will go straight toward her $16,000 in student loans.
"It was so easy to get a student loan. … But then two years later, it was like, 'Why did I do that?' " Tappan said. "I want to have most of my debt gone before I even think about buying a house."
The young marketing and management student is one of 38 million Americans who face a staggering $1 trillion in student loans, more than people nationwide owe on car loans or credit cards.
So instead of buying their first home after graduation, those educated debtors are running the other way, stoking worries that the massive debt could block many from the housing market just as it begins to rebuild.
For decades, young hopefuls like Tappan were one of the housing market's most dependable fuels. Young families and new buyers bought starter homes en masse, allowing sellers to move up into better homes.
But over the past decade, as the recession zapped jobs and student debt quadrupled, young buyers have started to stay away. First-time buyers have traditionally bought 40 percent of the homes on the market, National Association of Realtors data show. In May, their market share plunged to 28 percent.
Americans paying off student loans are, depending on income, 25 to 36 percent less likely to own a home than those who are free of student debt, a One Wisconsin Now survey of 61,000 people found last month. Indebted graduates faced an average of 21 years of debt before their student loans were paid off.
In Florida, more than half of the state's Class of 2011 graduated with an average of $23,000 in debt, Institute for College Access & Success data show. That's a little less than the average indebted American graduate who owes $27,000. Students at some local schools face an even weightier anchor. At the private University of Tampa, 58 percent of graduates flipped their tassels with an average debt of $31,000.
Student debt eats up first-time buyers' savings accounts, typically their first choice for making down payments. It stops them from qualifying for mortgages under banks' tight debt-to-income demands.
And it can discourage them from taking on new expenses. Students said they'll be forging into the chaotic working world already making hundreds of dollars a month in loan payments. Who has the confidence to add another bill, especially a big one like a mortgage?
Christa Hegedus, a USF St. Petersburg junior, said she expects to graduate into an unforgiving job market with nearly $10,000 in debt, despite her two scholarships.
"I have friends who graduated with thousands and thousands of dollars in debt, and they're working at a restaurant," said Hegedus, who wants to be a state senator. "I don't know how anyone could do it and expect to buy a house."
That two of the biggest life expenses, a home and an education, are now competing for the shrunken bank accounts of America's largest generation is not just a crisis of youth. Three-quarters of the $85 billion in late student loan payments are owed by people older than 30, Federal Reserve Bank of New York data show.
But student debt is particularly damaging for young buyers, hamstrung as they seek to build up equity or start a family. Over the past five years, homeownership rates for student debtors who are 30 years old, the typical age for a first-time buyer, have dropped a staggering 10 percentage points, to 23 percent, Federal Reserve data show.
"It definitely will have a negative effect on graduating collegians, in how long it may take before they're able to buy their first home. And that will have a ripple effect right through the whole economy," said South Florida independent housing analyst Jack McCabe.
"It interrupts the whole life cycle of real estate and, in essence, it takes a big chunk out of the foundation, which is that first-time home buyer. They're the ones that make everything go."
The deluge of debt could prevent many from paying not just for homes, but cars, vacations and other engines of the economy. The Consumer Financial Protection Bureau said in May that it could even "suppress risk-taking and innovation" among young entrepreneurs wanting to start their own small businesses.
Yet the shadow of student debt seems only to be growing larger. Last week, after Congress failed to extend a recession-era discount, the interest rate for new, federally subsidized Stafford loans given to students with financial need doubled to 6.8 percent.
Student loans typically run at much higher interest rates than mortgages, because they're linked to no collateral, like a house, that the lender can take back.
They are also much tougher to shake. For the most part, they can't be refinanced or dissolved through bankruptcy. And the lenders can go after delinquent loans by garnishing wages, tax returns and even Social Security checks.
"These things don't go away, no matter what you do," USF finance professor Ron Rutherford said. "There's no getting out of them."
Though home sales and prices have climbed in recent months, economists said the recovery has been driven largely by investors' big cash buys.
Without the inflow from young buyers, market watchers like the Realtors group's chief economist, Lawrence Yun, wondered whether the "mismatch" could keep the long-term housing recovery from truly taking hold.
For some graduates, student debt could prove only a short-term burden at the start of their careers. But others say they have already made up their minds about the risks of long-term debt.
USF St. Petersburg student body president Mark Lombardi-Nelson, who owes more than $10,000 in student loans, said he is not a "home-type guy" and plans to rent for years after graduation.
"I talk to professionals in their field who are 60 years old and still paying student loans. That's a scary thought, to be in debt for that long," said Lombardi-Nelson, 20. "To students of my generation … a 30-year mortgage sounds like a ball and chain."
Drew Harwell can be reached at (727) 893-8252 or [email protected]