New York Consumer News

BOSTON (CBS) ― It's a scary time to be a recent college graduate.

Jobs are scarce and many grads are sitting on mountains of debt. Students are borrowing more than ever to get their diploma and some worry this could be the next economic bubble to burst. CBS station WJZ-TV reports.

Crushing Debt

22-year old Jaclyn Ide is already experiencing that crushing debt. She's even considering giving up her cell phone so she can scrape together the payments on $60,000 in student loans.

"I'm working at a hotel, but I can not afford my loan payments," she said. "They are about $400 dollars a month."

When Jaclyn graduated last spring with a business degree from Becker College, she never imagined she'd be living at home, making $11 per hour.

"Luckily, I have my mom to help. If I was alone, I'd be in big trouble," she said.

After earning a bachelor's degree in biology, Lauren Collins went back to school to become a nurse practitioner. She too graduated last spring and she is lucky enough to have a well-paying job which she loves. But that job came at a hefty price.

"My total balance right now is $140,000," she said.

Her payments are over $1,000 a month, so she's saving money by living with a friend in Jamaica Plain.

"The payments themselves are almost that of a mortgage," she said.

Lauren and Jaclyn say most of their friends are in the same boat.

New numbers from the Department of Education show there are a lot of kids dealing with this problem.

The average debt for a graduate is now $23,000, that's up for $13,000 12 years ago.

According to Laurence Kotlikoff, professor of economics at Boston University, young people are getting the short end of the stick.

"This is exactly the opposite of the American Dream. This is the American nightmare," he said.

Next Bubble to Burst?

If you think this doesn't affect you because you don't have a student loan or you don't have any kids headed to college, you're in for a surprise.

Some experts worry this could be the nations next economic bubble and that means we'll all feel the pain.

"If you have more students coming out heavily in debt, they are not going to be able to buy cars or fancy restaurant meals or even pay rent at a nice apartment," Kotlikoff said.

A recent survey of college grads found 44% delayed buying a house because of their student loans, 28% put off having children.

"I've always wanted to stay home for a little while if I have children," Collins said, "but it's really not an option."

Bankruptcy is also not an option. Unlike credit cards and mortgages, student loans can't be wiped out of you get into trouble.

Jaclyn's mom feels like the average student has no alternatives.

"If you are rich it doesn't affect you. If you are low socio-economically, you will be getting help. If you are in the middle class, you just keep borrowing and borrowing and borrowing," she said.

"At some point in time, economically, the advantage of college for some students is going to go down," said Paul Combe of American Student Assistance.

According to Combe, the majority of graduates are able to manage their debt, but he's concerned that could change as tuition continues to rise faster than inflation.

"We are inflicting substantial debt onto people who are just starting off their life," he said. "It's counter productive to them and it's counter productive to us as a nation."

No Relief

Jaclyn and Lauren both feel students are not high on the federal government's priority list.

"If you can help out banks, you can help out big business; why can't you help out the students?" Jaclyn said.

"I feel like I've mortgaged my future to pursue my dreams," Lauren said.

Certainly, the economy is part of the equation. Many families have a lot less money to work with.

At the same time, experts warn that many parents spend a lot more time worrying about getting their children into college than how they are going to pay for it.

So what's the answer? Some experts predict a stripped-down college of the future.

Institutions, who are also struggling financially, may be forced to cut costs by offering more online classes and eliminating extravagant campus amenities.

These are the types of cuts that could change the college experience as we know it.

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