Class of 2012 hit with average debt of $29,400

Hadley Malcolm | USA TODAY

Show Caption Hide Caption Student loan debt at all-time high | YoungMoney The Class of 2012 graduated with an average of $29,400 in student loans, according to an annual survey out this week.

That%27s up from the %2426%2C600 debt held by 2011 graduates

Rising tuition%2C stagnant family incomes contribute to need to borrow

Students from Delaware graduated with the highest average debt

The average student debt load continues to rise as new data show the Class of 2012 graduated college with an average debt of close to $30,000.

The $29,400 last year's graduates hold in student loans is up from an average debt load of $26,600 held by 2011 graduates, according to an annual report from the Project on Student Debt at The Institute for College Access and Success.

While colleges are raising tuition, families' incomes are still suffering from the effects of the recession and remain flat — both factors are increasing students' need to borrow to attend school, says Debbie Cochrane, research director at The Institute for College Access and Success.

"Rising tuition and high tuition are certainly a contributor to increasing student debt, but it's far from the full picture," she says. "Family incomes and families' own ability to contribute to college costs has just been stagnant."

Sallie Mae's "How America Pays for College" study out earlier this year found parents' income and savings are covering 27% of college costs, compared with 37% in 2010.

"The post-recession reality is (parents) don't have the income and savings," Sarah Ducich, senior vice president of public policy at Sallie Mae, told USA TODAY in July. "It's not that they're not willing to stretch. It's that they don't think they have the money to do that."

Plus, many graduates are still having difficulty finding jobs that pay enough to cover student loan payments, Cochrane says.

"The down economy has really been a double-edged sword in many ways because (students) and their parents have fewer resources to pay for college costs, which may lead them to take on more debt," she says. "And then they're entering a down economy where it's hard to find a good job that allows them to repay the debt."

This year's Project on Student Debt numbers include data from the National Postsecondary Student Aid Study, which comes out every four years. It gives a more comprehensive picture of student debt, because it includes debt loads for students who went to for-profit colleges, where more students often graduate with debt and graduate with higher debt, Cochrane says.

To provide individual state and college data, The Project on Student Debt also collects data from colleges that volunteer the information, and few for-profit colleges participate, Cochrane says.

Students from Delaware graduated with the most debt — an average of $33,649 — while students in South Dakota were the most likely to graduate with debt, at 78% of graduates, the data show. South Dakota's average debt is $25,121.

While most students take out federal loans, a fifth hold private loans, the data show. Private loans have been known to be more difficult for borrowers to manage and have less flexible repayment plans. The Consumer Financial Protection Bureau's annual student loan ombudsman report out in October reported that students with private student loans in particular have difficulty enrolling in alternative repayment plans; private loan servicers also often allocate payments to maximize late fees and pay off low-interest loans first rather than costlier high-interest loans.