IStock Photo 9453032 © Marcela Barsse

It’s no stretch to say that student loans are the biggest crisis facing higher education right now. Rocketing tuition costs and a very tight job market have forced more students than ever—two-thirds—to borrow to pay for their education. And the amounts are staggering.

In all, Americans owe $527 billion in student loans. Put another way, if the federal government took every dollar it spent on Medicare last year and used it to pay off student loans instead, we'd still be $65 billion in the red.

Here are some quick facts:

• Average student debt rose nearly 25% between 2004 and 2008, to $23,200.
• Students borrowed $95 billion just to get them through 2008-09.
• 39% of Americans under 35 reported in 2006 that it will take them more than 10 years to pay off their loans—and those predictions have only gotten worse.
• 1 in 1.68 (60%) full-time, first-time undergrads at 4-year private non-profit colleges receive student loans in an academic year.

But if the numbers and stats seem numbing, for the people involved there’s real pain. Raya Golden took out $75,000 in loans to study at San Francisco’s Academy of Art University, but didn't count on graduating into one of the worst recessions ever. Now she owes $112,000 and lives on a Los Angeles friend’s couch while she looks fruitlessly for graphic arts jobs that don’t exist.

Zack Leshetz, a 30-year-old lawyer, has postponed his marriage because he can't pay for a wedding—thanks to his $175,000 student debt, which requires $800-a-month payments. “There's no way I can pay for a dream wedding, or even just a regular wedding. I feel like I'm putting my entire life on hold," he told the Wall Street Journal. He’s probably not alone, since 1 in 4.02 people aged 18 to 24 with a bachelor’s degree still have family incomes of less than twice the poverty level.

And debt-laden students are getting little help from colleges, because the colleges are hurting just as badly. Although 1 in 1.52 (66%) undergraduates receives some form of student aid, colleges have been forced to raise tuition faster than inflation. Public schools are especially desperate. The University of California system is expecting a 30% tuition hike for next year. Arizona raised its costs by 24% last year; at Oregon and Florida, the jump was 15.4%.

Many private schools, where tuition is steadier, are being forced to cut the no-loan programs they instituted in the past few years to help middle- and lower-income families pay for college. Dartmouth cut its no-loan program even as it raised tuition 4.6 percent to $52,275 (including room, board, and fees). The result: fewer students who can afford a top-flight education. Dan Lundquist, vice president for marketing and enrollment management at the Sage Colleges, put the question schools are facing this way: “Can we afford our values?” For many, the answer seems to be no.

So what should students do? Some are turning to graduate school, a route that prolongs the job hunt in a down economy—but results in still more debt. Others are placing their hopes in the federal government: on March 30, 2010, President Obama signed a bill consolidating loan power under the Department of Education, which is meant to make student loans easier to obtain and allow more debt forgiveness.