The cost of higher education in the US has been referred to as the ball and chain that follows many Americans to the grave.
Debt from student loans has exceeded an estimated $1tn in the US for the first time, surpassing credit card debt.
"You have students that are torn between making a decision about paying rent, buying food, doing laundry, buying books or paying back their student loan debt."
- Victor Sanchez, the president of the United States Student Association
And more and more recent graduates are having difficulty finding jobs to help them pay off their loans. It is a burden that some economists say is threatening any economic recovery in the US.
And it is not just having an impact on young people: Americans of 60 years of age and older still owe more than $30bn in student loans. Consumer advocates say that debt collectors go as far as seizing their social security cheques.
The cost of college education, which is six times more expensive today than it was 30 years ago, is only expected to rise.
Raeann Roca, a former student straddled with tens of thousands of dollars of debt, says: "We were always told that if you don't go to college, you're not going to make any money, you're not going to live the American dream."
Her university course cost more than $30,000 a year and to pay for it she did what her college advised and took out student loans.
"There are no bankruptcy protections associated with, uniquely, student loans. This has given rise to a predatory lending and collection mechanism where not only do the lenders make more money on defaults than on loans that remain in good stead through their collection activities but ... even the federal government are making more money on defaulted loans ...."
- Alan Collinge, the author of The Student Loan Scam
When she graduated she had $70,000 in student debt. She has already paid off $14,000 but the terms of her loans mean that five years after her graduation, she still owes just over $106,000 for her education.
It has been suggested that all this debt will crimp the lifestyles of students so much once they are in the workplace that they will not be able to afford homes, cars and holidays - further damaging the limping US economy. In other words, there is a bubble of student debt that is about to burst.
So what led to the rising cost of higher education and what does it mean for the struggling US economy?
Joining Inside Story Americas with Shihab Rattansi to discuss this are: Alan Collinge, the founder of StudentLoanJustice.org and the author of The Student Loan Scam; Pat Garofalo, the economic policy editor for ThinkProgress.org at the Center for American Progress; and Victor Sanchez, the president of the United States Student Association.
|"At this point with where the US economy is ... student loan debt is going to cause us a lot of problems in getting the kind of growth that we need, getting the kind of sustained growth, because the people that we are counting on to drive that growth - to spend money, to go out and form new households, to buy products and buy cars and start their own families - are instead going to be at home not doing those things because all their money is going towards paying off their student loans."
Pat Garofalo from the Center for American Progress
Source: Al Jazeera