GARY — Indiana University is putting together a multifaceted program to promote financial literacy as a means of helping students assess and manage their college debt.

“Student debt is the most important issue facing Indiana University financially,” Executive Vice President and Chief Financial Officer Neil Theobald told the IU trustees at their meeting Thursday on the campus of IU Northwest.

“Student financial stress is the number one reason, ahead of academic performance, for students leaving college,” said MaryFrances McCourt, IU treasurer and leader of a university-wide task force on assessing student debt.

“Students learn about pregnancy in fifth grade and drinking in sixth, but they’re never taught financial accountability,” she said.

Student debt has been a hot-button issue for the past several years, but it gained a national sense of increased urgency recently when the U.S. Department of Education announced that student loans have now topped more than $1 trillion — even more than credit card debt.

In a long and far-reaching presentation on student debt, the trustees were told that IU’s orientation and Web-based resources on financial aid and debt were simply not enough given the contemporary reality of rising costs and rising debt.

The average loan debt for undergraduate students with debt has risen from about $14,500 in 2007-08 to more than $16,000 in 2008-09 to about $17,000 for 2009-10. “You don’t have to be a rocket scientist to see that these trends are going the wrong way,” McCourt said.

The financial literacy program being put into place will include seminars, workshops and various opportunities for counseling regarding all forms of financial aid, the types of loans available and the academic major and career choices students should weigh early in their college careers.

“All debt isn’t bad,” McCourt said. “If some debt is going to get a student to college, it isn’t a bad thing.”

Theobald said students with the most debt in the IU system are at the regional campuses, and those with the most debt tend to be nontraditional students in their late 20s and early 30s who have lost jobs or see few prospects for higher earnings and look to a college education to improve their income potential.

He also noted that the debt problem is highest among Pell Grant recipients — in other words, students from the lowest income families who are seeking college degrees.

Education professor Vasti Torres told the trustees the university needs to not only adopt a more holistic approach to academic and career counseling, but also have a better system for helping students manage the transfer of credits inside the institution as well as outside-in. She suggested that there should be ways that students can put earned credits to better use if they switch majors midway through their college careers.

The financial literacy program the university will soon launch will report to the president’s office. IU President Michael A. McRobbie also spoke to the trustees on the debt issue.

“There is an important role in counseling for the institution,” he said. “Kelley (School of Business) has a high placement rate and a high-quality placement operation. We will be looking at how we can move career counseling to a new level.”

Torres called the counseling initiative “money well spent.”

“In many ways, students come into college having an idea what they want but having no sense of how they are going to get there,” she said.

The task force that studied student debt and wrote the recommendations presented to the board included: McCourt; Ken Carow, associate dean for research and programs, IUPUI; Rachel Delbridge, financial aid counselor, IU Southeast; Jim Kennedy, director of university financial aid; Phil Schuman, graduate assistant, IU South Bend; Sarah Soper, director of financial aid and scholarships, IU East; Jack Tharp, vice chancellor of student affairs, IU Kokomo; and Kurt Zorn, associate vice provost for undergraduate education, IU Bloomington.