Many graduating University of Iowa seniors will go from walking across the stage to walking into debt.

Over the last year, student loan debt nationwide skyrocketed an additional $125 billion, according to a report by Federal Reserve Bank of New York. Reaching a new milestone, student loan debt today totals more than $1.1 trillion.

Student loans are the second largest source of debt in the United States, being surpassed only by mortgage debt, according to the report.

At the UI, 16,771 students received financial aid during the 2012-13 school year. Those who graduated that year had an average debt of $27,304, according to a recent report by the Office of Student Financial Aid. 

UI senior Scott Carlson said that because he is an out-of-state resident, he is graduating with roughly $30,000 in student loan debt. Additionally, his parents will have $15,000 in debt to pay.

“I think it is really horrible so many students are graduating already in debt,” he said. “This level of debt is unacceptable.”

He said it bothers him he will have to struggle with debt when he graduates in order to provide himself with a future.

Six months after graduation, students are required to begin paying back their student loans, plus 3.4 percent interest.

Deciding how to repay these dues is a difficult burden many students face.

“In all honesty, I might have to move back in with my parents for a couple of years to save up the money needed to start living on my own and paying my debt,” Carlson said.

Mark Warner, the assistant provost for enrollment management and director of Student Financial Aid, said this amount is an increase of 3.8 percent from the average student debt for those who borrowed and graduated in 2012.

Warner said his office is doing all it can to minimize the amount students “need” to borrow by maximizing education about money management.

Beginning July 1, the Office of Student Financial Aid will employ two full-time financial-literacy specialists who will expand the services provided by the UI, Warner said.

Since 2005, the total student loan debt in the U.S. has increased more than $700 billion, and the impact of this trend may be a serious problem.

“Too much student debt may cause students to delay or forgo plans to enroll in graduate or professional programs,” Warner said. “It also might cause them to take second or third choice jobs simply because the pay is better.”

UI economics Professor Anne Villamil said the rising student debt could be attributed to two factors, including tuition at colleges and universities rising faster than the rate of inflation along with rising returns to a college education.

She said these returns to education — economic gains people may make by investment in their education  — cause more students to want to borrow in order to enroll in college.

“Some evidence indicates graduates with large amounts of debt consume less,” Villamil said. “Other evidence indicates graduates with debt are less likely to buy houses and cars, or decide to marry and start families.”

She added these factors could have large impacts on the economy and society, and student-loan debt shows no signs of slowing.

Martin Gervais, a UI associate professor of economics, said something he’s seen come from student debt is that students with more debt tend to accept jobs with lower pay.

“Since these individuals with student debt must repay their loans, they are willing to take up jobs that are relatively easy or quick to find,” he said.