The crushing impact of student debt

President Obama announced a plan Wednesday at the University of Colorado-Denver that could help millions pay off their student loans. It will let borrowers consolidate their debt into a single government loan at a lower rate.

But student debt in this country is approaching $1 trillion. On Wednesday, the College Board reported tuition and fees at public colleges rose by more than $600 this year. CBS News correspondent Dean Reynolds looks at what that means for students.

It would be nice if Katrina Manalac, a senior at the University of Illinois at Chicago, could just concentrate on her studies. But there's something else on her mind.

After she gets her diploma, she will have $50,000 in unpaid student loans.

"It's a really overwhelming feeling," Manalac described on what it's like. "As much as I don't want to think about it, I have to think about it."

She needed the loans to cover the ever-escalating costs of going to school -- costs that have risen 8.3 percent at public universities in just the last year to an average of $17,000, even for in-state students.

"The biggest reason for tuition increases quite simply are state budget cuts," said Terry Hartle of the American Council on Education. "In the unrelenting mathematics of public higher education, state budget cuts equal tuition increases."

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Now that the federal stimulus money to the states is running out, the squeeze will get worse.

In cash-strapped Illinois, the state owes nine public universities half a billion dollars in delayed payments. The consequences of that delay are larger classes, a faculty hiring freeze, and higher tuition.

To save money, Manalac had to move from the campus to her parents' home in the suburbs.

"Did you want to be living with your parents in your senior year?" asked Reynolds.

"No, I did not," Manalac said.

She wants to go to graduate school to become an occupational therapist -- meaning more loans and more debt.

Here is what CBS News' research department found out about the value of a college degree: The unemployment rate for high school graduates, -- 25 and older who didn't go to college -- is 9.1 percent. For those who have a bachelor's degree, it's 4.8 percent.

[OnTheCrown]

"The crushing impact of student debt."

That tends to happen when you take out student loans to get a degree that does not give a person marketable skills.

[01234567895]

Hopefully for Obama on second Term (Vote to Obama) ! Good Jobs Mr President !

[RobAla]

What about the impact of an outrageous $14.4 trillion national debt?

I have two children in college, and they have student loans to help pay part of the expense. A loan is a loan - it is not free money. If loans are forgiven after 20 years, the debt is still there. Who is going to be on the hook to pay it? President Obama is trying to purchase the votes of young Americans with taxpayer money.

I agree that higher education has become over inflated in costs, and part of the reason is that states have run out of money in this economy to supplement state colleges like they did at one time. Students have choices of schools to attend, and if they attend the more expensive colleges the more loan they may have. Why should others be on the hook to pay for their decisions?

Students should be looking at the failed polices of progressives which have added burdens of increased expenses and regulations on private sector businesses - if they are concerned about not having a job to pay the loan back. Progressive policy has crippled private sector business - and President Obama has led the way - and now he sends out the smokescreen of offering goodies for votes.

[01234567895]

Go chasing G.W.Bush & Dick Chenney pay back this Country 12.4 Trillion they took it and pass it to Halliburton CO ,Also,Bernald Madoff took it 150 billion and hiding in the Jail.Go get them Coward.Idiotic you are !Bunch Racist Slur !Uneducated !

[Southernstoryteller]

Your spouting the same old GOP rhetoric that every other conservative does: Obama is strangling small business...that's a load of crap!!! Big corporations sending thousands of jobs overseas under the BUSH administration is what is wrong with this country. How soon and easily you all forget what your man did while in office for EIGHT years!!!!

IF you had any idea what the President is actually offering, it's easier consolidation of all loans and loan payments tied to a graduate's income. Why don't you actually do a little reading outside of your conservative websites and blogs before you post.

[sharkboy234]

we will see you on the early show thursday on cbs good luck
tell it to nate berkus and the talk.

[poeticaintit]

That's why it's called a LOAN. However....it's criminal how so many ended up with loans they didn't even realize they'd agreed to....your financial counselors' handy work! That should be a crime even if the loan has gone into default at this point. Might as well set up a PAY DAY LOAN office in these colleges as deceitful as some of them are when kids come to them for advice.

[Southernstoryteller]

You have NO idea what you're talking about!!! I work in a financial aid office and students get extensive counseling at our school on loans, managing their credit, avoiding identity theft. WE are required to do it by our state and by the federal government. SO please don't make stupid accusations that you have no idea about.