Trapped in Debt: Student Loans Saddle Thousands of Mass. Borrowers

This is the first story in a series on student loan debt.

Growing up in western Massachusetts, Danielle Winters saw a college degree as the path to a better life.

Winters was raised by a single mother, who worked multiple jobs to support her kids. Winters landed a spot in a competitive college preparatory high school, and when the time came, she joined her brother in becoming the first generation of her family to go to college.

Winters considered private schools outside of Massachusetts, but chose to study at Framingham State University, reasoning a public school where she qualified for in-state tuition would be a smarter financial choice.

Winters finished her bachelor's degree in 2016, but her education left her deep in debt. She struggled to find work, and her loan payments have been on hold since graduation day, with the interest continuing to accrue.

"I am still paying zero dollars on it because I don't make enough to even make a payment," she said. "So that's four years of interest accruing on top of $45,000."

Winters was hired this fall as a long-term substitute art teacher in Springfield. She's glad to be in the classroom, and looking forward to a career in education. But Winters doesn't know how she'll deal with her outstanding loans.

She isn't alone. According to federal data, roughly 1 million people in Massachusetts have school loans. Earning a bachelor's degree at a typical four-year private school in the state will saddle the average student with around $25,000 in debt, according to the U.S. Department of Education.

And for many, that debt weighs like an anchor, delaying major milestones like getting married, buying a home or buying a car.

"Folks feel very trapped in this debt," said Persis Yu, a lawyer who studies federal student loan policy at the National Consumer Law Center in Boston.

Nationwide, federal student loan debt has tripled, rising from about $516 billion in 2007 to more than $1.5 trillion today, according to federal data.

Experts say one factor driving the significant increase is the rising cost of tuition at all types of institutions. Thirty years ago, it cost around $14,000 a year to attend a four-year school, adjusting for inflation. Today, it costs almost twice as much.

And many students can't pay back their debts. About one in 10 graduates default on their loans within three years of receiving their degree, according to federal data.

The financial picture often grows worse further out from graduation day. The NBC Owned Television Stations found that from 2013 to 2017, the repayment rate fell across the board, at public, nonprofit and for-profit colleges alike. In 2013, 71 percent of former students were current on their loans seven years after leaving school. By 2017, the latest year available, the rate had fallen to 57 percent, our analysis of U.S. Education Department analysis showed.

And that's just the percentage of former students who paid at least a dollar of principal and kept up with interest. Economists who got access to confidential student loan and Treasury data reported in a 2017 paper that at some schools, former students owed more money five years after leaving than the day they graduated.

And once you're behind in paying back your debt, things can really spiral.

"Borrowers will then get harassing phone calls, collection letters. They'll see it negatively reported on their credit report," Yu said.

Declaring bankruptcy rarely helps. People who default on student loans, unlike those who get into trouble with credit cards, auto loans or home mortgages, rarely can seek relief in bankruptcy. Congress and the courts have slammed that door for all but the most extreme cases of inability to pay.

And the federal government has a range of tools to claw back money from student loan borrowers, including seizing tax refunds and federal benefits, such as social security.

"The student loan debt feels like a heavy burden that they can't escape," Yu said.

Despite its rising cost, college remains a good investment. People with bachelor's degrees on average earn $57,000 per year, $12,000 more than high school graduates, according to the Census Bureau. People with graduate degrees earn tens of thousands more.

But college is not a windfall for everyone: The people who have the most trouble paying college loans paradoxically are those with the smallest debts. Adam Looney, a former Treasury official, and his colleague Constantine Yannelis found that people owing $10,000 or less for college were five times more likely to default than people owing $100,000.

These small debtors typically come from low-income families and attend for-profit colleges or two-year public colleges to learn a trade. If they can't earn a living quickly, they have few resources to pay the loan. Many also leave school before graduating, leaving them with the debt but not the degree.

And the loan crisis is hitting people of color hardest, data shows. Even with a degree, African American students are five times more likely to default than white students, in part because they must rely more heavily on debt to finance their education, experts say.

"I think we're going to see the ripple effects into the community ... " Yu said. "It's impacting the resources that these families have to contribute to their community members, to local businesses in their neighborhood."

Winters, the art teacher in Massachusetts, said she hopes the kids in her classes have better choices to pay for school when they grow up.

"Nationally, something's got to give," she said.

Material by NBC Owned Television Stations Data Editor Ronald Campbell was used in this report.