When students at the University of Minnesota exhaust their federal financial aid options, the Minnesota Office of Higher Education offers them the option of taking out SELF loans, which offer more favorable terms for students than private student loans. In order to provide a boost to the state economy, Minnesota could forgive the millions of dollars in outstanding SELF loan debt. This form of debt relief would help the most debt-burdened students in the state, since SELF loans are only available after federal loans have been maxed out.

The burden of student debt is strangling the economy. Not only do recent graduates have much less money to spend, but they feel trapped by debt. Rather than experiment and start an innovative business after college, indebted students feel that they have to enter the traditional workforce immediately. Students with significant debt take fewer risks, and innovation suffers.

Forgiving student debt on the state level will also free up money for recent graduates to pump into the state economy âÄî they are more likely to buy things like their own homes and cars in addition to increasing their monthly spending on things like groceries. This will boost demand in the economy and make more than just students better off.

Some other helpful things that could be done are making SELF loans able to be deferred after graduation in certain cases or able to be consolidated with federal loans. The state could also use SELF loan forgiveness as an incentive for students to join professions

Minnesota needs, the way the federal government does with teachers in low-income areas. Whatever the solution, there are many things that can be done at the state level to tackle the problem of student debt.