'Indentured students' jump as U.S. loans corrode education ticket

By Janet Lorin

Bloomberg News

Published: Monday, July 9 2012 8:00 p.m. MDT

The recession that began in December 2007, combined with increases in college costs, prompted more anger from students and indebted families.

Worth It?

Obama said in 2009 before a joint session of Congress that by 2020, "America will once again have the highest proportion of college graduates in the world." At the same time, others began to question whether graduating with a high level of debt was worth it.

To ease the burden on federal loan borrowers, Obama has promoted a plan that took effect in 2009, letting them make payments based on income. For those whose circumstances don't improve, their loans can be canceled in 25 years. Under a plan unveiled last year, some borrowers' debt could be canceled in 20 years.

The younger Brezlers may need help with their debt for the next few decades. While Geraldine Brezler and her husband Mario paid for their children's undergraduate educations, the three, all in their 30s, took on debt for graduate school yet haven't landed the full-time jobs they'd expected after additional schooling, she said.

Second Master's

Their daughter, Katherine, 30, graduated from college in 2005, earned a master's degree in education and is working on a second one in urban affairs. She has defaulted on some of her loans as she tries to cobble together an income from teacher's assistant jobs while seeking a full-time teaching position.

David, who has been at his parent's house since August, carries on with his job search. In the meantime, he freelances as a Spanish interpreter for doctors and in courtrooms from 20 hours a week to 20 hours a month. His brother Benjamin, 34, just finished a master's degree in microbiology and continues to interview for jobs.

"The hope was you get more advanced degrees and get a better job and it just hasn't panned out that way so far," Geraldine Brezler said.

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