For many Americans, student loans are the only way to pay for a college education, but new figures are showing that repaying them is crippling borrowers across the country.
According to the Department of Education, the national two-year default rate rose to 8.8 percent last year from 7 percent in fiscal year 2008. The overall increase was mostly from students borrowing from the government to attend for-profit colleges.
The troubling figures are coming at a time when recent graduates are being hit from all sides. New Census Bureau information shows that 14.2 percent of 25- to 34-year-olds lived with their parents in 2011, a 25 percent increase from before the recession began.
Many are living at home because they can't find full-time positions, like Andrea Jansky, a 24-year-old graduate of New Jersey's Fairleigh Dickinson University. She earned her Master's degree in Education, but can't find a full-time job as a teacher. She financed most of her college education with student loans, and owes close to $100,000. She works two part-time jobs – as a substitute teacher and as a tutor at a learning center – and pays what she can.
"If I didn't have them financially, to live with them, then I wouldn't be able to pay that part," she said. "We have been out two years now and we don't have full-time jobs."
Like many of the people who took out loans to cover college costs, Jansky said she wasn't thinking about the payments she would have to make post-graduation.
"It doesn't seem real," she said.
Caitlin Lewis, a 23-year-old graduate from West Virginia University, has a full-time job, but still struggles to make the $560.89 monthly payment to her federal, Sallie Mae and American Education loans. She pays them on her own, and even though she graduated a semester early she says she is up to her ears in loan debt.
"Biggest fear: being laid off from my current job and having no way of making payment," she said. "Loan companies do not care if I was out of work…they want their money."
Lewis and her boyfriend now both live with his parents to save money because they are both inundated with loan debt and other expenses. She is also accumulating credit card debt because she is low on cash to pay for necessities.
"Never did I once think monthly payments would be this high," she said. "There really is not an alternative to go to college. Unless you're born with a silver spoon in your mouth, it seems hopeless."
It's not just young adults who are burdened with thousands of dollars in loan costs. Many parents intending to help their kids are making payments for them. Some, like Lisa Yeates of Hillsborough, N.J., took out loans in her own name, and co-signed some of her daughters, to help with the expense.
"I didn't think of student loans," she said when she was helping her daughter Kimberly choose a school. "I told her to go where she wanted. I wanted her to go somewhere she would be successful and not somewhere she would hate…we would deal with the student loans after the fact."
Her daughter now pays some of the loans, while Yeates pays the others. Together they pay close to $1,000 every month.
"I've been paying the first student loan for five years and I feel like I haven't made a dent in it," she said. Meanwhile, Yeates and her family have had to change their lifestyle to afford the payments each month.