"I'm sitting here sometimes wondering, oh, can I afford to go do food shopping today or do I need to wait until my next paycheck, and I'm sitting here feeling like what was the point?" Mercado said.
She says the loans take a quarter of her take-home pay as a social worker, leaving her barely enough money for living expenses. But government loans like Mercado's do have advantages over private loans. You may have the right to a temporary deferment or a flexible repayment plan.
Students should only get loans from private lenders, like banks, as a last resort, advises Suzanne Martindale, an attorney and student loan expert.
"Private lenders don't have to offer flexible repayment plans to students. And they may not come with fixed interest rates for example. And so that may make them costlier and riskier, harder to repay," Martindale said.
Other ways to minimize student debt are consider attending a state school, and submit the federal loan application, called the FAFSA, as early as you can. You should also borrow only what you really need, not the amount you qualify for.
Consumers Union, the advocacy arm of Consumer Reports, says, however, no matter how careful borrowers like Mercado are, their debt is having a profound effect on the economy.
"In record numbers, young people in their 20s and 30s are delaying major purchases, such as buying a car, buying a home, starting a family," Martindale said.
Consumers Union is calling for changes in current law so students get standardized, easy-to-read info about financial aid options including grants and scholarships before they commit to loans. Also, students should have the right to refinance their loans as a circumstances warrant. And private lenders should be required to offer flexible payment options as the government now does.