INDIANAPOLIS -- The Call 6 Investigators have uncovered a perfect storm brewing in Indiana, where student loan debt is threatening to damage the economy and drown Hoosiers, whether they went to college or not.

Indiana has the third-highest student loan default rate in the country according to the U.S. Department of Education, Call 6 Investigator Kara Kenney reported.

The average Hoosier graduates from a four-year college owing $27,001, putting Indiana eighth in the country for highest debt rate.

Only New Hampshire, Maine, Minnesota, Pennsylvania, Vermont, Iowa and Ohio had higher debt levels for the class of 2010.

RTV6 found former students all over Indiana, of different ages and backgrounds, who went to school to better themselves and are now wracked with enormous student debt.

Most students RTV6 spoke with had a combination of federal and student loan debt they said ballooned due to late payments, interest and fees.

"Everyone always told me, 'You have to go to school in order to make something of yourself,'" said Miranda Clephane, 30, a 2008 graduate of the University of Indianapolis.

"I'll die before I get this paid off," said Diane Kelley, 59, a flight attendant.

Kelley went back to school in the mid `90s to become a travel agent and is still more than $16,000 in debt.

"I'm going to be forced to work the rest of my life. It's kind of a scary thought," Kelley said. "(The loans) just keep snowballing."

Anthony Hatfield, a 2009 Ball State University graduate, is more than $130,000 in debt.

"It seems like I'll never be able to pay that," said Hatfield, who runs a web design company out of his apartment.

RTV6 spoke with many students who said they don't make enough to afford the monthly payments. The situation affects all Hoosiers, since the former students can't afford to make major purchases that drive the local economy.

"I don't see myself ever being able to buy a house. I don't know how I'm going to afford children or their college," Clephane said.

"I don't know how I'm going to get a car," said Tony Pulliam, who graduated from flight school and now has more than $60,000 in debt. "I can't get anything on credit. I guess it's a life sentence."

Experts said Hoosiers are facing a perfect storm for a student loan debt crisis.

The rules for wiping out student loan debt are so stringent, very few people qualify for bankruptcy.

"It's almost impossible to get rid of a student loan," said Indianapolis bankruptcy attorney Mark Zuckerberg. "You have to meet three rules. You have to be living at poverty level, you have to have made a good faith effort to pay the student loan back and it is unlikely you will ever pay it back."

Also, Indiana families don't make much to start with -- Indiana ranks 42nd in per capita personal income, according to the Indiana Commission for Higher Education.

Combine that with a tough job market, and many people are left with degrees but without work to fully pay off their debt, and those who are employed are often making lower salaries than anticipated.

"There are a significant number of students who are, in fact, not working at the levels they thought they would be," said Teresa Lubbers, Indiana's commissioner for higher education.

Lubbers also said another problem is the rising cost of tuition and fees.

The average freshman at an Indiana public college or university paid $3,233 a year in 2000. In 2011, that figure rose to $6,576.

Chart: Tuition Increases By Institution

"It's true that tuition and fees have gone up to the tune of about 100 percent since 2000, so I think the concern people have about the cost of education is a real one," Lubbers said.

University financial aid offices tell RTV6 they're more than willing to help students stay out of debt in the first place by offering installment plans and budgeting help.

"We take it very seriously," said Chuck Ranard, interim director of financial services at Indiana University Purdue University-Indianapolis. "We're always looking at ways we can help students, counsel them on keeping loan debt low."

IUPUI offers a website to help students budget for their tuition.

Many students told RTV6 they don't believe the lenders fully explained what they were getting into.

"They gave me a $20,000 loan, put it right in my checking account," Celphane said. "I had no idea how hard it was going to be to pay it back."

Students also said lenders are not quick to lower payments or interest rates.

"They don't want to work with you," Clephane said.

But the Financial Services Roundtable, which represents all the major lenders, said lenders do everything they can to help former students.

"Lenders, both government and private sector, are bending over backwards to work with borrowers," said Scott Talbott, chief lobbyist for the Financial Services Roundtable. "They're spreading out interest payments, they're lowering interest payments, they're waiving fees, they're changing the terms to make them more favorable."

Talbott explained that the industry is working to simplify contracts, but said it's still up to consumers to read the fine print and ask questions.

"Any borrower should do what a good consumer should do and shop around," Talbott said. "The Internet is a fantastic tool to do your research and find out which lender is offering the best rates."

Congress is considering legislation that would allow students to discharge their student loans through bankruptcy, something the Roundtable does not support.

"Lenders would adjust the interest rates to reflect that risk of dischargability and so everyone would end up paying more to finance their education," Talbott said.

But many families told RTV6 that bankruptcy may be their only way out, and the only way to become a financially productive member of society.

"Do not take out any more student loans than you have to," Kelley warned. "Take out the bare minimum. Keep on top of it. Don't let it default."

Lubbers said students should not be discouraged from pursuing a degree or certificate.

"If you look at the unemployment rate, it's double for those who only have a high school diploma," Lubbers said.

Lubbers also said students should be realistic about their major and how likely they will be able to get a job right out of college. Finishing a degree is also key, she said.

"The worst of all combinations is a student who starts college and doesn't complete, because then they leave with no credential and no way to pay down the debt," Lubbers said.

Student Loan Information and Resources:

Petition on Student Loan Bankruptcy Protection

To Consolidate Student Loans

Student Loan Justice Group

National Student Loan Database System

State Student Assistance Commission of Indiana (SSACI)

Student Financial Aid Information

Deadline for FAFSA forms in Indiana is March 10, 2012

Sallie Mae: Sallie Mae offers Education Investment Planner as a free resource to help families build a customized plan to pay for their degree

Indiana College Costs Estimator

Cash for College Campaign

CashCourse.org

Loan Information from the University of Indianapolis