More South Dakota college students leave school with debt than any other state, according to a recent survey by the Project on Student Debt.

Seventy-five percent of South Dakota students in the graduating class of 2010 had student loan debt after college, according to the survey, an initiative of the nonprofit independent research organization Institute for College Access & Success.

The state's student debt loan average is $23,171.

Jack Warner, director of the South Dakota Board of Regents, said one positive thing is the average student loan debt rate has changed little in South Dakota during the past several years.

"We've been at $23,000 for a while," he said. "There's good news about that."

Surrounding states such as Wyoming, Nebraska and Montana fared better.

In Montana, 65 percent of the class of 2010 had debt, with the state average of $22,768. In Nebraska, 62 percent finished school with loans at an average size of $21,227. In Wyoming, only 42 percent of students had debt and the average size of the loan was $20,571.

Nationwide, the class of 2010 also had the highest unemployment levels for new graduates - 9.1 percent - in recent history, according to the survey.

The report found that the states with the highest average debt for 2010 were in the Northeast and the Midwest. The states with the lowest debt were in the West. New Hampshire has the highest average debt at $31,048 and Utah had the lowest with $15,509.

Warner said the biggest reason 75 percent of students in South Dakota graduate with loans might be the lack of a state-funded needs-based student loan program. South Dakota is the only state without one, he said.

Warner said a needs-based loan program was created years ago, but the state has never funded it.

"It would certainly help make higher education more affordable for our lowest-income students," he said.

The state does have a merit-based program, called the Opportunity Scholarship. Yet the Opportunity Scholarship provides just $5,000 to students.

"That gets us part of the way there," Warner said.

Rep. Kristi Noem, an outspoken opponent of President Barack Obama's student debt-loan forgiveness program, was somewhat surprised to learn that South Dakota is considered a high-debt state for college students.

"I wouldn't generally think that because our universities ... here in South Dakota offer real competitive rates," she said.

South Dakota was ranked sixth out of seven surrounding states when it comes to tuition costs. The 2010-2011 regional comparison of tuition costs from the South Dakota Board of Regents reports that annual tuition fees in South Dakota for 2011 were, on average, $7,096. That's compared to $4,125 in Wyoming, $6,410 in North Dakota and $5,798 in Montana.

Noem said she recognizes that many South Dakota students pay their own way through school and that "the fact that tuition is outpacing inflation is a big concern."

Get news headlines sent daily to your inbox

But she doesn't believe that state-funded loan programs are the answer.

"At the end of the day ... what this would do is make it easier for taxpayers to be on the hook for student loans," she said.

Instead, she would like to see more emphasis on distance learning, which includes online courses that allow students to save money by staying at home.

"I would encourage more of that type of education policy," she said.

Despite the need and the numbers, Warner isn't optimistic about a needs-based scholarship becoming a reality anytime soon, mainly due to the state's recent budget cuts.

"I'm mindful of the state's fiscal position," he said. "The state is doing as well as it can do within the constraints of resources it has to allocate."

Warner said there is good news out there in regard to South Dakota students.

"South Dakota has among the lowest default rates in the country," he said. "That tells us two things. One, it tells us something about the integrity of our population and our students. The second thing it tells us is our graduates are likely earning a wage premium."

Contact Lynn Taylor Rick at 394-8414 or

You must be logged in to react.
Click any reaction to login.