After graduating from the University of Notre Dame with $172,000 in college loan debt, a young suburban woman sought help from financial planner Joseph Orsolini.

She told him she had secured more loans to enroll in law school and was working a retail job making $800 a month.

"When she gets out (of law school), she'll be 27 years old and $300,000 in debt," said Orsolini, president of College Aid Planners in Glen Ellyn. "She wanted to be a prosecutor, and the average starting salary is around $57,000 a year ... but her student loans were going to cost her $42,000 annually."

It's an extreme example of a common problem: Students facing sky-high college costs sometimes have little choice other than to shoulder tremendous debt, and then have no means to pay the loans back.

At this time of year, when high school seniors select which college they'll attend in the fall, they also have to start to figure out how to pay for it. With many schools charging upward of $30,000 a year for tuition and housing, many students rely on government and/or private loans to help cover costs. However, the consequences of the debt are often difficult for young people to understand.

"They say, 'I'll just borrow $100,000 to go to Indiana (University) instead of Illinois State.' They never stop to think, 'What's my life going to be like after I graduate? Do I want to have a car? Do I want to live with my parents?'" Orsolini said.

Along with high debt, new grads are struggling to find jobs with salaries sufficient to meet their loan payments, financial aid experts say.

Jobs scarce for grads

Two-thirds of college seniors graduated with an average of $25,250 in college loan debt in 2010, and faced a 9.1 percent unemployment rate -- the highest unemployment rate for young college graduates in recent history, according to The Institute for College Access & Success' Project on Student Debt.

As a result, college loan defaults are shooting up. It's such a big problem, some economists predict it could be the next economic "bubble" to burst and pull down the economy.

Illinois students are doing worse than the national average. The U.S. Department of Education's "cohort default rate," a percentage of a school's borrowers in a repayment program, is 8.8 percent nationally -- almost double what it was in 2005. Illinois' rate is 9.1 percent. At the state's 236 colleges, more than 16,000 people have defaulted and nearly 176,000 are in a repayment program, according to the most recent national data from 2009.

Most Illinois colleges and universities are actually below the national average, but the state's rate is pulled up by higher default rates from some community colleges and proprietary (for-profit) schools.

At Elgin Community College, most of the 9.8 percent of students who defaulted on their loans were first-year students who were struggling academically, said Amy Perrin, Elgin Community College's director of financial aid and scholarships, who studied the situation. The average loan amount was $4,900, she added.

ECC is working hard to prevent future defaults, so the school is taking the unusual step of requiring every student who applies for a loan to sit down one-on-one with a financial aid counselor and do a budget. They figure out exactly what the students' expenses will be and what they'll need to borrow, and it's made clear that the debt will stick with them even if they declare bankruptcy, and can lead to garnished wages or withheld tax refunds.

"We at least want them to think through why they need it, and think about wants versus needs, and really understand what they're signing," Perrin said. "Students will come in and say they want the max, so these counseling sessions have been really good at lowering the amounts they're going to be taking. We had one student come in, and she had no idea. She said she wanted $17,000. After the counseling session, she ended up taking $800."

ECC holds regular, free workshops on the topic through the year, and Orsolini speaks about it at suburban libraries and high schools. Orsolini says a certain amount of debt is OK, but advises students to consider how much they're going to earn when they graduate and parents to set limits on what they'll contribute. Many students should consider compromising -- perhaps starting at a community college, attending a school that offers scholarships, or choosing a place where they don't have to pay full price, out-of-state tuition, he said.

While each student's circumstances are different, Orsolini generally discourages students from borrowing more than what's available through the federal loan program -- $27,000 a year for four years.

Another resource for students and families is the federal government's new College Affordability and Completion, which provides school prices and comparisons, plus easy-to-understand information about college costs that will help them make informed decisions.

Parents paying less?

Some college loans are harder to get, according to local financial aid sources, in part because of the growing number of financially troubled parents unable to cosign on loans. Or in some cases, the parents refuse to saddle themselves with overwhelming debt for their child's college education.

"The people who are borrowing (large amounts) don't have help from their parents because they either can't or won't pay for the college," said Marty Rossman, director of financial aid at North Central College in Naperville. "The federal loans are not the loans getting people in trouble. It's the people that are borrowing $40,000 to $100,000 to get an undergraduate degree that we're most concerned about."

Every day, Rossman said he tries to warn students about the potential dangers of borrowing more than they can afford and to communicate what this debt will mean after college.

"We ask, 'How are you going to have to cover that cost?' We say, 'Are you really sure you want to do this, and do you know what this means? Because maybe North Central is not for you if you have to borrow this much money,'" Rossman said.

Despite these efforts to give college students a wake-up call, college costs continue to rise and the nation's outstanding student debt is nearing $1 trillion, according to reports.

"You can't stop them from doing it," Rossman said. "Who are we to say this is a bad choice? We just try to educate them about the debt and that's all we can really do."

Bills: Two-thirds of 2010 college graduates had average of $25,250 in loan debt