"It's just overwhelming," said Cleary, 24, of
More than two years since she graduated from
The reason they can't buy a house, Cleary said, is that their student loan debt is too high.
The Clearys offer a case study in what a growing number of economists fear: The weight of student debt is dragging down the housing recovery and overall economy.
In recent weeks, economists from Federal Reserve Chair
The earning potential for college graduates over time appears to justify the cost of education, but some experts say the short-term effect on the economy is cause for concern, as recent graduates put off buying homes and making other financial investments.
Cleary owes nearly
Their debt load is higher than the norm -- average debt for the Class of 2012 was
Seven out of 10 college students graduate with loan debt. Student debt is more than
Not for everyone
Even as schools consider financial models to control tuition increases that outpaced inflation, the economic drag of student debt raises questions about whether benefits of a college education justify the heavy burden of paying for it.
For some people, the answer is yes. But perhaps not for everyone.
"To me, there are some people that are not suited to an academic setting in college," said
Americans burdened with college loans lag their peers when it comes to accumulating wealth, according to a report from
Earning a four-year college degree remains a worthwhile investment for the average student, because higher earnings far outweigh the cost of a degree, according to a report this year from the Federal Reserve Bank of
Still, some people worry that the weight of student loans is widening the wealth gap in America.
Two people who begin with the same income can end up in vastly different financial situations, depending on how much they borrowed to finance their educations, said
Someone without debt can invest money in stocks, retirement or a home and get a jump-start on accumulating wealth that, over a decade, will put him or her at a significant financial advantage over peers who defer those investments to pay down loans.
"Part of it really is how much wealth you're able to start off with," Elliott said. "Student debt just eats away at that ability to have a reasonable amount of assets in the beginning, particularly low-income people."
Not everyone needs to go to college, and some people, including
Elliott doesn't dismiss the value of community colleges, but he says promoting them as an alternative for people who cannot afford a four-year degree builds inequality back into the system.
"There is this general mindset that there is this choice. But when you say that, who are you talking to? You're essentially talking to low-income children, because you're not telling rich people, rich upper-income kids, 'Make a choice,' " he said. "So then you end up with this steering thing that exists, where you're putting high-achieving, low-income children in two-year colleges, which actually invests less in a student."
Sukits said that students and families need to be smarter. Spending two years at a community college and then transferring to a university can significantly lower the cost of attaining a bachelor's degree, he said.
Too often, students and families do not understand the real implications of borrowing to finance a degree that may not prepare a student to find a job after graduation, he said.
Students make decisions based on emotions, rather than considering the financial return on their investment.
"The word I hate to hear is 'passion,' " Sukits said. "If you're going to take on student loans, you should major in something that makes you marketable to get a job."
There is no doubt that recent graduates are taking on more debt even as they enter a difficult job market, said
"I still say the gains that they are going to experience -- they may not be immediate, but they are going to work out over the next 30 to 40 years of their working lives," Fry said.
Cleary acknowledges she was naive when she signed her loan applications. Loan officers told her that she would "have options" to reduce the cost of paying back her obligations, such as loan consolidation. She since learned that those options don't apply to her private loans.
She doesn't regret going to college. It is, after all, where she met her husband. Both have teaching certificates, and she hopes that, one day soon, she will find a job that puts her degree and teaching certificate to use.
"If I'd have known that I was only going to be making
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