“U.S. housing markets may be emerging from the foreclosure crisis, but for many children, problems caused by the slide in home values haven’t ended. Foreclosure can have a lasting impact on children’s academic performance, says Ashlyn Aiko Nelson, an associate professor in the School of Public and Environmental Affairs at IU Bloomington.
“We know that, if a family is foreclosed, it can involve a huge amount of stress in the home,” she said. “And the sort of financial stress that would precipitate a foreclosure would contribute to adverse outcomes for children, for their health and emotional well-being as well as academic outcomes.”
Nelson has conducted research on the relationship between housing instability and academic performance in schools in California and Florida. She said studies confirm that foreclosure can be tough on children — not only because of psychological stress but because of the disruption of moving from one school to another. But the effects aren’t always as straightforward as one might expect.
One study found that children whose families experienced foreclosure had worse test scores in math in subsequent years. However, the effect held only if the foreclosure was for owner-occupied homes, not rental homes, suggesting family stress may have been the problem, not the fact of foreclosure. Nelson said some states adopted rules that required leases to be honored when homes were foreclosed and sold at auction, lessening disruption for children.
Paradoxically, government policies intended to protect homeowners from foreclosure may have had a negative impact on children. In some cases, the rules had the effect of drawing out the foreclosure process, extending the time that children were unsure where they would be living.”