Plan for loan debt

Financial aid should be distributed prior to enrollment.

Daily Editorial Board

With tuition costs on the rise, it has become necessary for many students to take out loans to pay for college. Most students don’t realize how much they’ll have to pay for school until after they see their first financial award notice, which is usually processed long after registration.

The average debt college students in Minnesota face after graduation is currently the third largest in the country. In 2011, college graduates left school more than $29,000 in debt — a 5 percent increase from the 2010 national average, according to a report conducted by the California-based Institute for College Access and Success. The average University of Minnesota-Twin Cities graduate left with $28,407 in debt in 2011.

Most students rely on loans to get them through college; only about one-third of students pay the full sticker price for school, according to a report assessed by the College Board. Although loan debt is hard to avoid, a greater understanding of how much debt will compile after obtaining a four-year degree would be helpful when planning for school. About 70 percent of graduates in Minnesota had loans, and 20 percent of what they owed came from private, non-federal student loans.

Earlier this year, the U.S. Department of Education created a model financial aid award letter that puts grants and scholarships from the school and the government in a separate category than loans in an effort to avoid confusion and let students know upfront how much school is going to cost them. Since September, more than 300 schools — 10 percent of all undergraduate colleges — have adopted the education department’s model.

Colleges should distribute a clear, straightforward financial aid letter to each student before they choose to enroll. Distributing a financial aid letter before enrollment would encourage better financial awareness before students commit to a school.