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Roshell Schenck has a Ph.D. in pharmacy and earns $125,000 a year. Yet, because she has more than $110,000 in student loan debt, counselors have told her she can't qualify for a mortgage.

"I'd love to buy and can afford to buy," says the 28-year-old graduate of Lake Erie College of Osteopathic Medicine in Erie, Pa. With lenders scrutinizing college loans more closely than in previous years, it's almost impossible for borrowers such as Schenck to get approved for mortgages. "My debt is crushing my chances of purchasing a home."

Last year outstanding education debt passed credit card debt for the first time, according to Mark Kantrowitz, publisher of FinAid.org, a student loan website. Totaling close to $1 trillion, America's mounting pile of outstanding student debt is a growing drag on the housing recovery, keeping first-time homebuyers on the sidelines and limiting the effectiveness of record-low interest rates.

According to a recent Federal Reserve study, only 9% of 29- to 34-year-olds got a first-time mortgage from 2009 to 2011, compared with 17% 10 years earlier. "First-time homebuyers are typically an important source of incremental housing demand, so their smaller presence in the market affects house prices and construction quite broadly," Federal Reserve Chairman Ben Bernanke said at a homebuilders' conference in Orlando, Fla., on Feb. 10.

Recent college graduates carry an average debt load of more than $25,000, limiting their ability to qualify for mortgages even if they're able to land a job in a market with an unemployment rate of 9% for 25- to 34-year-olds. Dubbing it a "student loan debt bomb," the National Association of Consumer Bankruptcy Attorneys warned on Feb. 7 about the effects of rising student debt on recent graduates, parents who co-signed their loans and older Americans who've gone back to school for job training.

"Just as the housing bubble created a mortgage debt overhang that absorbs the income of consumers and renders them unable to engage in consumer spending that sustains the economy, so too are student loans beginning to have the same effect, which will be a drag on the economy for the foreseeable future," John Rao, NACBA vice president, said on a conference call.

People aged 25 to 34 made up 27% of all homebuyers in 2011, the lowest share in the past decade and 6 percentage points below their 33% share in 2001, according to the National Association of Realtors. "Students coming out of college are burdened with more debt than traditionally they have been, and they are also coming into an economy that is underperforming previous recoveries," says Rick Palacios, a senior research analyst at John Burns Real Estate Consulting in Irvine, Calif.

Palacios says first-time buyers are key to a housing recovery because they allow current owners to move into larger, pricier homes. "Move-up buyers need somebody to purchase their homes to move," he says. "You need that first leg in the recovery to materialize."

Since the overall number of first-time homebuyers has fallen, people aged 25 to 34 still accounted for 52% of that group last year, near the average since 2005, according to the Realtors group. Still, almost 6 million Americans in that group lived with their parents in 2011, up from 4.7 million when the recession began in 2007, according to U.S. Census Bureau data.

Although housing prices have fallen by about one-third from their 2006 peak, young adults who are starting to move out of their parents' houses want to rent, not buy. While single-family housing starts posted their worst year since 1963 last year, multifamily housing construction has surged as more Americans rent.

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It may take years before young people return to the market as homebuyers. For her part, Schenck, who lives in Waterford, Pa., and works as a pharmacy manager for a grocery chain, still wants to buy at some point. She's trying to build enough savings for a larger down payment, to increase her odds of getting a mortgage.

"I haven't given up hope of one day owning my own home," Schenck says. Still, "the dream feels like it's farther out of reach than I ever thought it would be."

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