It’s hard to get a business loan when you’re starting your professional life behind the eight ball.

Meera Louis of Bloomberg News reports.

$1 Trillion Debt Crushes Business Dreams of U.S. Students

Dr. Steve Sherick wants to build the emergency-care business he started two years ago that now employs seven doctors and two part-time administrators. The $300,000 in student loans he and his wife carry makes that prospect difficult, he said.

Sherick, 36, who contracts with a local hospital in Trinidad, Colorado, about 200 miles south of Denver, graduated in 2009 with about $140,000 of debt. That’s not counting the student loans of his wife, a pediatric oncologist, and their mortgage. He would like to hire a full-time administrator and offer more competitive salaries to entice doctors to work in the rural community.

“It deters an entrepreneurial spirit when you already start four steps behind the starting line,” said Sherick. “The student debt increases the risk for an entrepreneur like me and makes it harder to expand new business, get loans and thus hire new people.”

Former students hobbled by a collective $1 trillion in education loans can be hindered in expanding or forming small businesses and creating jobs for themselves and others. While self-employment among those 65 years old and over increased 24 percent in 2010 from 2005, it fell 19 percent among individuals 25 and under in the same period, according to the Small Business Administration.

“The burden of student debt probably places pretty big constraints on your viable options after graduation,” said Dane Stangler, director of research and policy at Kansas City-based Kauffman Foundation, which focuses on supporting entrepreneurship. “With more student debt and stricter bank lending, it really hinders the ability of students to take risks, start a company.”