A friend of mine told me a story about a student in Connecticut who is trapped in debt. I don’t think I have to mention her name. What most important is that we can learn something from her experience.

She was always a top student. Her hard work paid off when she was accepted for a prestigious early-entrance program at the University of Southern California. The Resident Honors Program (RHP) selects only exceptional and highly motivated students to begin college a year before graduating high school. The recruits were from the top 4 percent of sophomores nationally. From a pool of 25,000, between 30 and 60 join the program each year.

She got a $6,000 scholarship, along with $19,500 in grants and work study. In order to make the required fees and expenses of $28,000, She took out a $2,500 student loan her first year. She thought it was a manageable amount.

Once she got to USC, she worked for a month at a grocery store, then got a work-study job for 20 hours a week, $6 an hour. An irregular schedule caused her to miss RHP activities, and she had to skip some classes. But keeping her debts under control seemed worth it. Her first summer home, she worked on a farm and earned $1,000 which was enough to buy her plane tickets.

Her second year, USC’s tuition fees increased by $2,000, and her mother’s income increased by $1,000. Ironically, this pushed her family out of the ‘low-income’ category, and she lost half of her grant money. She considered transferring to a less expensive school, but USC’s general education classes were so obscure that she’d have to repeat her freshman year anywhere else. So she held her nose and took out a $9,500 loan, hoping to apply for scholarships later on.

She got another work-study job — on top of running two student organizations, taking honors-level classes, and dealing with a roommate from hell. Getting to the library was becoming impossible, so she took out a $1,500 loan to buy a laptop. It was her first experience of a private student loan, and she was told it wasn’t much different from a federal loan. The interest was slightly higher, and there were slightly different rules, but overall it all seemed the same.

After Christmas, the overload became too much, and she had to prioritize. She decided that leadership and education were more important than meaningless employment, so she quit her job and took out another $2,000 private loan. She naively hoped that her education would someday allow me to earn more than $6 an hour.

Her third year, She attended Edinburgh University in Scotland, where tuition fees were half of USC’s. That year, she needed only a $4,000 loan, and didn’t have to worry about a job. But the next year brought hardly any grant money, and rather than give up in the ‘home stretch,’ she took out more loans than she ever expected she’d need.

When she graduated in the summer of 2002, she was $36,000 in debt. Her only consolation was that her debts were equivalent to one year’s cost of attendance — a bargain, really.

The average debt at graduation in America is $19,300. In the United Kingdom, it’s $16,000; in New Zealand, $9,600; in Germany, $7,000. And there’s many other student who shares similar story. This is where people usually need debt help. I don’t particularly suggest you to take out a home equity loan or a second mortgage as a way to consolidate your loans. This will only lump your debt payments into one single payment. Moreover, it may also lower the interest rate and lower your monthly payment amount (by extending the term of the loan).