ANDERSON, Ind. — When Elizabeth Finley began her college career, she never imagined she’d end up with $100,000 to pay back in student loans. “I knew I’d be in debt,” the Anderson woman said, “but not a hundred grand.”

Finley’s case isn’t as rare as you might think. Student debt has followed the skyrocketing trajectory of college tuition rates.

How does $1 trillion strike you? Student debt across the United States has surpassed that mark. It has exceeded mortgage debt and credit card debt, according to Indiana Commission for Higher Education official Jason Bearce.

Over just the past decade, the average tuition and fees of Indiana colleges alone have increased by more than 100 percent, he said.

If scholarships, grants and Mom and Dad can’t cover all those costs — and it’s rare that they can — loans are often the fall back. And there is less government aid available, relatively speaking, than in the past.

The federal Pell Grant has increased just 39 percent over the past decade, from $4,000 in 2002 to $5,550, said Dave Murray, president of the National Center for College Costs.

Murray noted that average student debt has tripled over the past five years.

Why so high?

The rising cost of a college education has been attributed to a variety of sources.

In 2010, Indiana cut state funding for higher education by $150 million, meaning the state’s taxpayers are not providing as much support for state colleges and universities.

State Rep. Terri Austin, D-Anderson, wasn’t fully in favor of those cuts but said they were designed to send the message that institutions of higher education need to live within a budget, too.

Kim Passmore, whose daughter Shaley is a 2012 Anderson High School graduate, said they’re scraping up money so that Shaley can attend Ball State University in the fall. Shaley has about $4,500 in scholarships now, but the tuition and fees for BSU will be about $9,000 for the year.

Kim Passmore said they are hoping to receive more aid and not have to take out loans. They’d rather pay out of pocket if they have to, she added.

“I feel like the cost of education increases larger than income increases, and we can’t keep up with the costs,” she said.

The Passmores are blown away by costs of private schools like Anderson University, where the average debt of a 2010 grad was $32,700, according to Ken Nieman, director of student financial services.

Rising tuition costs are “a very complex topic,” said Randy Howard, Ball State’s treasurer and vice president for business affairs.

A Ball State 2010 grad was saddled with an average debt of $24,124, according to the Project on Student Debt.

While state funding of Indiana’s public colleges and universities has gone from 10 percent in 1980 to under 7 percent now, Howard said, the universities must also deal with inflation and fluctuations in enrollment. Increases in supply costs and health care drive up tuition costs, as well, he added.

While schools set their own tuition, the Commission for Higher Education puts out recommendations — Bearce calls them “nonbinding tuition caps” — and institutions are required to present tuition rate proposals to the state budget committee and also to conduct public forums.

Private schools, such as Anderson University, don’t receive direct state or federal dollars.

Brent Baker, vice president for student life at AU, said the tuition price tag increases because of rising costs of utilities and health care and shrinking federal student aid.

He said AU tries to keep those costs as low as possible. “We’re mindful of the reality that private education is an investment and requires ... keeping increases as low as possible.”

Baker added that AU’s tuition increases of 2.5 percent each of the past couple of years have been the institution’s lowest increases in the past four decades.

Borrow now, pay later

Loans can seem like the easy way out to a college student.

The money can be used to pay bills until one has earned a college degree and gone on to a career. But that’s when it can get difficult. Finding a good job can take months, even years, and sometimes the pay is lower than anticipated. In the end, a multi-decade struggle to pay off the loans ensues.

The U.S. unemployment rate is at 8.2 percent, according to the U.S. Department of Labor, and the Madison County rate was 8.9 percent in April (the last month of availability for county numbers).

Passmore said many of her coworkers at the Indiana Department of Child Services in Madison County have loans to pay off and aren’t earning as much money as they had hoped. The outlook, she said, is discouraging.

Finley, the graduate with $100,000 in debt, just received her masters in social work from IUPUI and works at the Youth Opportunity Center in Muncie.

In school, she had a Pell Grant and a scholarship for which she had to maintain a 3.5 grade point average, along with a part-time job. But she didn’t have any help from her family, had to commute to school, had a son to take care of and rent and bills to pay.

Finley didn’t take out private loans. She did, however, take out both subsidized and unsubsidized loans with interest rates of 3.8 percent and 6.8 percent, respectively.

The federal bill that lowered those rates to 3.4 percent for subsidized loans will expire July 1 and, without action from Congress, the interest rate will double.

By the time Finley had received her bachelors in 2010, she was already about $60,000 in debt. Then she went for her master’s degree, with nothing to rely on but loans.

During Finley’s undergrad years, she and her friends would sign up for the maximum loan amounts.

“I didn’t know better,” she said. “It was like, ‘OK, I’ll take it.’”

She said some of her close friends without children have debt similar to hers. “To me, it tells me none of us were prepared.”

Looking back, Finley acknowledges she probably didn’t need to take out so many loans. More interaction from financial aid officers during her senior year of high school and throughout college, she believes, might have helped her understand her options better and prepared her for the realities of debt.

Making guided choices

Many schools do offer loan counseling. According to Howard, Ball State representatives start to talk about financial responsibilities to prospective students in high school and then work with BSU students throughout their college careers.

“We try to be as proactive as we can,” he said.

AU assigns counselors to keep students in tune with what they are receiving and owe, Nieman said, so they “understand the basic tenets of what they’re obligating themselves to.”

But some students, signing a legal document for the first time, don’t fully understand the reality of the loan commitment and enormity of the debt that ultimately follows.

Bearce said it’s important to make it clear what return on investment should be, what students should expect to pay for an education and what they can expect to earn with their college degree in hand.

Summer courses and online courses are also often offered for less. Students should think about where they want to go, what they want to do with their degrees and how costs will affect those decisions, Bearce emphasized.

“All degrees matter,” he said, “some more than others with the job market.”

Taking longer to finish

Shaley Passmore, the recent Anderson High School graduate, has a couple of scholarships lined up and is trying to qualify for others. Living at home while she goes to Ball State will help cut costs, but then there’s the price of commuting.

“With everything else going on — life in general — we didn’t set aside,” Kim Passmore said. “We didn’t save.”

Sending a kid off to college is a new experience for the family. Two older siblings did not attend college.

Shakey Passmore may hope to graduate within four years. If she does, she’ll be in the minority. A mighty contributor to student debt, Bearce said, is that students are taking longer to finish college. Only a third of all Indiana students graduate in four years. Less than half graduate within six years of starting college.

When they don’t finish, they usually earn lower salaries and have more difficulty paying off their loans. Those who don’t graduate are 10 times more likely to default on their loans, Bearce said. Student loan default in Indiana has increased 35 percent over the past three years alone.

As an incentive for universities to improve graduation rates, the state offers performance funding. State schools receive more money when they graduate more students and get more out in four years or less.

Looking ahead

Finley has a 7-year-old and a 6-month-old. With two kids and a job in social work, it’s going to be a pain to pay those loans back. “It sucks,” she says flatly.

She’ll have to follow a strict budget. Her boyfriend helps out by pitching in on household bills and watching the kids to save childcare costs.

She plans to make the minimum loan payments, about $300 a month, at first.

“I’m already thinking, ‘Put so much back now so I’ll be prepared and it’s there,’ ” she said. Her six-month grace period ends later this year. After that, she’ll be paying month after month after month.

Despite her debt, Finley feels she received a good education from IUPUI and says the debt will be worth it. She’s doing what she loves.

Shaley Passmore, the 2012 high school grad, said she doesn’t want to worry about student debt.

“I filled out the FAFSA hoping for the best,” she said, referring to the Free Application for Federal Student Aid, which students must complete to receive federal assistance.

But Shaley is realistic and said a lot of students don’t seem to realize the significance of taking out loans.

Kim, Shaley’s mother, said they’ll take out the loans if they have to; Shaley’s education is worth it, and they believe it will pay off for her in the long run.

“If that’s what we have to do,” Kim Passmore said, “then that’s what we’ll do.”

Find Dani Palmer on Facebook and @DaniPalmer_THB on Twitter, or call 640-4847.