HispanicBusiness

Eric Euting, a graduate of Milwaukee School of Engineering, knows the pain of private student loan debt.

In addition to $15,000 in Stafford subsidized loans, he took out $65,000 in private loans, which he consolidated before the economy tanked. But he chose a fixed rate of 8.25% and can't get a break, he said.

Euting has been paying $422 per month just to cover interest on the private loan -- so far, over $20,000 in interest alone, he said. "And I haven't even touched my principal." Add the $90 per month Stafford loan payment, and his monthly student loan payment is $512.

He makes about 33% less a year than what he owes in private loans, Euting said.

The analysis by the nonprofit Pew Research Center found that about one out of five (19%) of the nation's households owed money on student loans in 2010.

That's more than double the share two decades earlier and a significant rise from the 15% who had student loan debt just prior to the onset of the Great Recession in 2007.

The relative burden of student loan debt, whether computed as a share of household income or assets, is greatest for households in the bottom fifth of the income spectrum, even though residents of such households are less likely than those in other groups to attend college in the first place, according to the analysis. In 2010, the least affluent fifth of households owed 13% of the outstanding student debt, up from 11% in 2007.

"As a society, we need to worry more about the people who fail to graduate or get the credential," said J. Michael Collins, a professor of consumer science and faculty director for the Center for Financial Security at the University of Wisconsin-Madison. "They'll never get the bump in pay or be able to pay back their obligation."

No one is suggesting the return on college is forever going to be lower, Collins said. "Once they're in the labor market, it gets better. They just face a longer-term gap before a degree pays off."

It's complicated, Collins said. In the mid 2000s, if a student was offered a loan, his or her parents had enough home equity that they could get a better loan rate than the student. Not any more. Private student loan terms are quite expensive, he said.

"We're seeing higher student debt ratios to depressed incomes and decreased spending on all kinds of things."

Willingness to take on high debt is part of the problem, said Chris Cholka, 26, of Waukesha, who has paid off about half of his $20,000 loan debt and has increased his payments to eliminate the debt quicker.

"Everyone thinks it is OK to live with debt; it is not," Cholka said. We need to teach young Americans to live within or below your means, pay off credit cards in full every month and not ask the government to bail you out of student loan and credit card debt."

Cholka said he thinks career-specific degrees also are more likely to lead to jobs than liberal arts degrees. "Everyone that I know that has a career-specific degree is able to find jobs and pay off their debt. I, for one, am an accountant and my wife is a nurse."

The data analyzed by Pew came from the Survey of Consumer Finances sponsored by the Federal Reserve Board of Governors and the Department of the Treasury.

The Wisconsin survey was not a random sampling. Individuals on the group's mailing list were asked to respond to an online questionnaire, so the nearly 2,700 respondents were self-selected. Of those who responded, more than a third of those with bachelors or advanced degrees were making student loan payments. The survey and analysis were done by an outside research firm, Corvus Insights of Madison.