Dreams Deferred: The High Cost of Student Loan Debt

"Ken," who asked that we not use his real name or other identifying details, recently graduated from an Ivy League university with a degree in computer science, and he will also have earned his master's degree from the same school by the end of the summer.

While elite schools are known for their generous financial aid packages, Ken's degrees came at a high price: $142,000 in student loans. Being the youngest of four in a family where everyone attended private school from elementary through high school meant that his parents were left in a difficult spot -- ineligible for financial aid, but also not even close to being able to cover the school's $50,000+ price tag per year for tuition, fees, room and board.

Good News and Bad News

To complicate matters, his father lost his job prior to Ken's junior year and, while he eventually did find another one, his salary took a steep dive: from $200,000 a year to $60,000.

The good news is that Ken found a job at a top software company, where he'll earn $80,000 his first year.

The bad news? For years Ken, a technology aficionado, has dreamed of working at a startup company. But his sky-high loan repayment obligations have made that dream impossible.

"I needed to find a job ASAP because I needed to start earning enough money to pay my loans," he said. "I didn't have the luxury of waiting. I would have loved to have the luxury of working at a startup, but I couldn't do that because of the student loans."

"It's hard for a large company to come up with new and exciting things," he adds. "There's 10 levels between me and the president. In a startup, it's easier to get things approved. I liked the idea of not only having a designated role, but being able to wear multiple hats, which you can't really do at a large company."

Paying Off Debt for Next 20 Years

And what about starting his own business? That's on hold, too.

"It'd be great if I was saving up money to do my startup, but I have so much debt that I'll be paying it off for the next 20 years," he says.

Ken believes that he could have gotten the same education and job by attending "any college," although he won't go so far as to say he regrets his choice.

But for now, it's fair to say that student loans have dramatically altered the course of his career. And he's not the only one. A 1998 survey conducted by Nellie Mae found that 17% of borrowers reported that "Career plans were significantly changed because of student loan debt." A 2006 report from the State Public Interest Research Group's Higher Education Project found that student loan debt frequently turned grads off to the possibility of service-oriented careers like teaching and social work.

The takeaway for families is this: Before you sign on the dotted line for student loans, recognize the huge impact that debt can have on the soon-to-be graduate's career opportunities. Education is all about opening the door to a life of possibilities, but those possibilities can be dramatically limited by student loan debt.