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Katelyn Graham’s $62,000 in student loan debt is holding her back.

The SUNY Oswego alumna has a combination of federal and private student loans, and while she has a good job, she and her boyfriend, JJ Michael, have been denied a mortgage because her debt-to-income ratio is too high, thanks to her student loans, she said.

“Even though my hourly wage is good, to pay $600 a month, that’s outrageous,” Graham said of her student loan payments. “We can’t even get a mortgage. It’s not like I have $60,000 in credit card debt, or I took out a loan to buy a motorcycle or something. I went to school to better myself, so I could get a better job and make it farther in life, and it feels like it’s only holding me back.”

Stories of student loan debt are everywhere in the region and nationwide. Young people are told to get a secondary education to better themselves, but emerge with a mountain of debt and a degree that, especially in a tough economy, may not always help them find a job.

In some cases, they follow their passion to a profession in which their paychecks can’t compare with their debt. Others can’t find jobs in their chosen fields and are earning lower wages working in retail or waiting tables, if they can find a job at all.

Graham hears stories similar to her own all the time at work, at the One-Stop Career Center in Queensbury, she said.

She has a bachelor’s degree in administration, and she studied abroad for a semester in Australia. She makes $600 payments monthly to pay off her student loans, and she’s set up to pay them off in 15 years. Going the full-term for the loan would mean she would pay $119,000, or nearly double, because of interest, she said.

For the first two years after she graduated, she was making interest-only payments and just began paying off the principal about a year ago. Michael works at General Electric Co. The couple said they’re the lucky ones among their friends, even if they aren’t approved for a mortgage and have to contend with weekly child care costs for their 9-month-old daughter, Harper.

“Thankfully, we have good jobs, but we’re barely making it,” Graham said. “We can’t get a house, so we have to stay renting, but we may move to a smaller place. It’s so tight that we’re going to move. It’s like we’re stuck.”

Growing costs, debts

Student loan debt is the only type of consumer debt that has increased since consumer debt peaked in 2008. It has eclipsed automobile loans and credit cards and is now second only to mortgages, according to the Federal Reserve Bank of New York.

The issue has become increasingly politicized, as concern grows over the growing collective student loan debt in the country, which totals around $1 trillion. Close to $70 billion of the loans are in default. It was an issue in this year’s presidential election, with President Barack Obama and GOP challenger Mitt Romney sparring over Obama’s income-based repayment program proposal.

Congress is expected to consider a bill soon that would change the system by tying interest on student loans to market rates, capping loan payments at 15 percent of an individual’s income after basic living expenses and withholding the amount in their paychecks, similar to taxes.

Nearly 20 percent of American households had student loan debt in 2010, which was about double the amount compared with a decade earlier.

Meanwhile, tuition and fees at private American colleges and universities grew 3.9 percent from last school year, according to a survey conducted by the National Association of Independent Colleges and Universities. That is the smallest year-over-year average tuition increase on record since 1972, when the National Association of Independent Colleges and Universities began collecting that data.

Last school year, graduates of bachelor’s degree programs at private colleges and universities left school with an average of $28,500 in debt, which compares with $22,000 in debt among students at public institutions.

‘Scary to owe that much’

It’s not just a certain type of student who has debt — people take out loans to finance everything from an associate degree to a Ph.D., like Glens Falls native Erin Coon. Coon is looking at about $150,000 in debt when she finishes her online Ph.D. program through Capella University in 2014, she said.

Coon is the operations manager at Charles R. Wood Theater, a job she got after receiving her master’s degree in 2010, but her debt is continuing to pile up — she’s in a four-year Ph.D. program because she would like to teach one day, she said.

She got her bachelor’s degree from SUNY New Paltz and paid off the roughly $20,000 in student loan debt by living at home with her parents and working.

“It’s scary to owe that much money when you’re 21,” she said.

Once she paid that down, she went to Indiana University for her master’s degree. The tuition was more expensive because Coon was from out of state, and there were also fewer funding options, she said.

“I’m getting my Ph.D. now because I don’t want to go back to school later in life — it’s only going to get more expensive,” Coon said. “I’m just taking out enough to pay for my tuition and, four times a year, I’m waiting for the money to clear so everything is paid for.”

Coon is scheduled to finish her Ph.D. in June 2014, and because her program is online, she pays thousands of dollars out of pocket in registration fees for conferences, as well as travel expenses.

Because Coon works for a nonprofit, there’s a government program that allows her student loans to be forgiven if she makes 120 on-time full payments, though that still means a decade of paying back her loans, she said.

“That’s kind of what I’m counting on,” she said.

‘Squirrel everything away’

Lynsey Urrico graduated from SUNY New Paltz just as the job market started failing.

The Lake George High School graduate returned to live at home with her parents with a history degree and $20,000 in student loan debt, and ended up taking a job at a hotel.

“I very quickly leaned it’s not that reliable in our area, because once the tourists leave, they kind of close up shop for the season,” Urrico said. “You have to squirrel everything away and hope you have enough to make it through to your tax returns.”

For the past few years, she has done that to get by, but expects she’ll be paying off her student loans for a long time.

“I was able to defer my loans for a little bit, but the interest keeps going up. I have $20,000 to pay back and that’s growing every time I have to defer it,” Urrico said. “I live with my parents because I can’t afford to have a house or apartment on my own. I help them out when I can by picking up groceries or a vet bill.”

‘I think it’s worth it’

Jamie Ainsworth has $45,000 worth of student loan debt from her two years at ITT Technical Institute in Albany. Most of the loans she has are federal loans, but she had to take out a personal loan to finish her associate degree. She wants to go back to school to at least get her bachelor’s degree, but that’s out of the question right now.

Ainsworth recalled the process she went through to get a student loan — being told she needed a co-signer when she didn’t have one.

“I went home and cried,” she said. “It was terrible.”

Ainsworth works as an electronics technician at Integra Networks in Albany, and she and her boyfriend rent a house from her grandfather in Hudson Falls. Her boyfriend is also paying off student loan debt, and her grandfather doesn’t charge them a lot for the house, which is the only way they’re able to make it work, she said.

“In order to go back (to school) I would have to either pay as I go or maybe look for some assistance,” Ainsworth said. “I tried to do that at ITT, but I didn’t qualify because I was in that certain bracket where I got absolutely no help basically. That hurt me a lot.”

Caitlin Hartung, a Fort Ann High School graduate, is more fortunate than some of her friends. She hasn’t had to take out any loans yet to pay for her first year at the College of Saint Rose, but she knows it’s inevitable, she said.

She’s majoring in political science with a minor in pre-law, and she wants to attend law school in the future. She already has a few friends who are leaving after the semester because the cost is too high.

Tuition is about $37,000 per year, she said.

“The sad thing is, you want to better yourself, you get a good job and half your salary goes to (paying off) loans,” Hartung said. “Was it worth it, or was it not worth it? I think it’s worth it, but some people don’t. I hope I can put off loans as long as possible.”