New data released by the U.S. Education Department on Thursday, reveals 39.3 percent of adults ages 25 to 34 earned an associate's, bachelor's or graduate degree in 2010. That's 0.5 percent increase over the previous year, but still far below the level needed to vault the U.S. ahead of other countries in the race for the most college graduates.

Officials blame rising tuition costs for contributing to lower graduation rates.

In remarks to the National Governors Association on Friday, Education Secretary Arne Duncan urged states and institutions to help the federal government keep costs down. Tuition at four-year public universities rose 15 percent between 2008 and 2010, an increase driven largely by cuts to state funding.

"We've made some progress, but the combination of deep state budget cuts and rising tuition prices is pushing an affordable college education out of reach for middle-class families," Duncan said.

But critics say government goals and incentives aren't enough to persuade students to pursue a higher education. Unless they see the value of a college degree for their own lives, they won't invest in a college degree.

The United States ranks 16th in the percentage of young adults who have earned a college degree, falling behind South Korea, Canada, Japan and Russia, according to a 2011 report by the Organization for Economic Cooperation and Development. In South Korea, 63 percent of adults ages 25 to 34 have earned college degrees, compared to 41 percent in the United States.

While the proportional amount of young people in the U.S. with college degrees is about the same as older adults who are now exiting the labor market, some experts fear the number of people with a post-secondary degree is failing to rise fast enough.

The U.S. has 35.7 percent of the world's college graduates in the 55 -to-64 age bracket, but only 20.5 percent in the 25-to-34 age range.

"Part of it is that the rest of the world has caught up to us," said Thomas Bailey, director of the Community College Research Center at Columbia University's Teachers College.

Bailey noted it was only in the last 10 to 15 years that education leaders had a consistent measure for graduation rates at colleges. He believes leaders need to focus especially on low-income and minority students, who have the lowest college completion rates. Community colleges and vocational schools could also play an important role in improving the numbers, he said.

Shortly after taking office, President Obama announced his goal for making the U.S. the world leader in college graduates by 2020.

In order to meet that goal, an estimated 10 million more Americans ages 25 to 34 will need to earn a two- or four-year degree, according to this week's report.

The government numbers show most states need to make dramatic improvements to meet the goal of having 60 percent of the nation's young adults with a college degree. In Florida, only 816,946 adults ages 25 to 34 have a post-secondary degree. That number will need to increase to at least 1.48 million. In New York, the number will need to rise from 1.3 million to 1.67 million.

Montana saw the largest year-to-year increase in young college graduates, rising from 37.1 percent in 2009 to 40.3 percent in 2010, but the state also has one of the smallest populations. North Dakota has the highest percentage of college graduates in the 25 to 34 age range, at 50.8 percent, but its population also is relatively small compared to other states.

Nearly 69 percent of young adults in the District of Columbia had a college degree.

Education leaders and advocates for increasing college access and completion said the overall increase was not strong enough.

"It is a small jump and it's nothing near what we need to see to be competitive," said James Applegate, vice president for program development at the Lumina Foundation, which works toward improving college enrollment and completion.

The foundation set its own goal of increasing the proportion of the U.S. population with a higher education degree to 60 percent by 2025.

But not everyone thinks young adults will be motivated to improve their education by outside goals or government incentives. Ultimately, students need to see the value of higher education for their own lives, they say.

Karin Agness, director of academic programs at the American Enterprise Institute, a conservative public policy research think tank in Washington, DC, encourages recent graduates and young, unemployed Americans to take ownership of their futures by considering what will help the country overall.

"Learn how government manipulation of market forces stunts job growth," she wrote in a recent blog post on the Values and Capitalism blog. "Read about the differences between an economy based on free-market principles and one in which government picks the winners and losers...when you are in the voting booth, you can make an informed decision to elect politicians who support policies that will improve our economy."

The Associated Press contributed to this report.