Minnesota students carry more debt than others

by Janice Bitters

A new report from the Minnesota Office of Higher Education shows the state's college graduates are among the most indebted in the country.
The average debt for Minnesota graduates was $29,800 as of 2012, higher than the national average for student debt by nearly $5,000.
At the University of Minnesota's Twin Cities Campus, the median amount borrowed in 2011 was just over $19,000, according to U.S. Department of Education. The campus ranked highest for median debt of all University campuses.
The report by the OHE is updated every year, but the most recent data includes for-profit colleges for the first time, increasing the state's debt averages, according to The Star Tribune. Graduates from for-profit colleges borrowed an average of $45,100.
Students at the Art Institutes International Minnesota had the largest debt in the state, according to the Star Tribune. The average debt for graduates with bachelor’s degrees at the school was $55,200.
The OHE report said loans to students increased more than 200 percent between 2001 and 2011, most of which was due to higher federal borrowing. Student grants increased at a slower rate — 184 percent — in the same period. Loans need to be repaid after students leave school, but grants do not.
Minnesota students may face high student loans, but they also tend to pay back the loans reliably after graduation. According to the OHE report, only 7 percent of Minnesota students default on their loan repayments within two years of graduating, compared to 9 percent nationally.
Tricia Grimes is a policy analyst for the OHE. She told the Star Tribune, "While many students may be experiencing difficulty repaying, they seem to be managing it somehow."
Students who attended two-year or for-profit institutions, both public and private, tended to have higher default rates. But at Minnesota public four-year institutions, like the University of Minnesota, the default rate was 4 percent.