As student debt for new graduates continues to climb, borrowers need to pay close attention to the type and the terms of the loans they seek, even if the loans come from state programs, a new report finds.

Nearly 7 in 10 graduating seniors had student loans in 2015, and their average debt was just more than $30,000 — up about 4 percent from the previous year, according to a report this month from the Institute for College Access and Success.

The report is based on data reported voluntarily by schools. More than half of the public and private nonprofit four-year schools that grant bachelor’s degrees, or more than 1,100 colleges, participated. For-profit colleges were not included because so few reported student loan data. The report is the group’s 11th annual analysis of student debt at graduation.

The average debt varied by state, from $19,000 in Utah to $36,000 in New Hampshire.

About one-fifth of the student debt reported was from nonfederal loans, including those from private lenders and state-based programs. Such loans generally cost more and may lack the consumer protections offered by federal loans, like the ability to have monthly payments tied to the borrower’s income and the option to suspend payments if you lose your job or have some other financial setback.

Financial aid experts recommend that nonfederal loans be used only after federal loan borrowing limits are reached. Yet about half of those who borrowed private loans had borrowed less than the federal maximum, the report said.

Some states, including Minnesota, Texas and New Jersey, sponsor education loan programs of their own, which generally offer costlier terms than federal loans, the report noted. Students may assume that state programs offer similar protections as federal loans, but that is not usually the case. They are often more akin to private bank loans.

“Approach state loans with skepticism,” said Alexander Holt, of New America, a research firm in Washington. Here are some questions and answers about student loans:

Q: What is the current interest rate on federal student loans?

A: The rate on undergraduate student loans borrowed through June 30, 2017, is a fixed 3.76 percent.


Q: What is the borrowing limit for federal loans?

A: Annual limits vary depending on the number of years in school, whether students are financially dependent on their parents and other factors. Generally, the maximum for freshmen who are dependents is $5,500; the limit rises to $7,500 a year for juniors and seniors. Overall borrowing is capped at $31,000. Students whose parents are ineligible for PLUS loans may be able to borrow more.


Q: What if I need to borrow more than the federal loan limit?

A: Federal loan limits are intended to prevent students from taking on too much debt, Holt said. So if students need to borrow more, they should consider whether the college they want to attend is too expensive for them. Students, he said, should ask themselves, “Does it make sense to pay this much?” He suggests using the College Scorecard, a tool offered by the Education Department, to check data on student graduation rates and starting salaries to determine whether your school is worth the money.


Ann Carrns writes for the New York Times.