MN College Grads Have 3rd-Highest Debt in Nation
Recent Minnesota college graduates have the third-largest average debt in the country, according to a recent study by the California-based Institute for College Access and Success.
The study found that students who graduated from Minnesota colleges in 2011 had an average student loan debt of $29,793, higher than the national average of $26,600. New Hampshire and Pennsylvania are the only two states that have a higher average student loan debt than Minnesota, according to the report.
Minnesota ranked fifth in terms of the percentage of 2011 graduates who have college loan debt—a figure that stands at 71 percent. Nationally, 66 percent, or two-thirds, of 2011 college graduates have student loan debt.
According to the study, recent college graduates have entered an “enormously difficult job market,” which poses challenges for those who need to begin paying back student loans. The unemployment rate for young college graduates in 2011 remained high at 8.8 percent, a slight decrease from 2010, which saw the highest annual rate on record at 9.1 percent.
Meanwhile, a separate study by the Project on Student Debt found that among private colleges, Minneapolis College of Art and Design graduates can expect to leave with the most debt, with 2011 graduates carrying $43,035 in unpaid loans. Following it were The College of Saint Scholastica ($41,282), Concordia University ($36,757), Concordia College ($35,240), and St. Catherine University ($35,237).
Among public schools, Winona State University grads carried the most debt, at $31,275, followed by the University of Minnesota—Duluth ($31,168), Minnesota State University—Mankato ($29,415), St. Cloud State University ($28,819), the University of Minnesota—Twin Cities ($28,407), and Southwest Minnesota State University ($26,394).
In terms of loan defaults, Minnesota’s schools have an overall student loan default rate of 9 percent, below the national average of 13.4 percent, according to data recently released by the U.S. Department of Education. Since 2009, about 9,500 Minnesota graduates have defaulted on their student loans, the department found.
Minnesota-based private, for-profit schools have an overall default rate of 10.1 percent, less than the 22.7 percent national average. Meanwhile, the state’s public four-year schools have an overall default rate of 4.4 percent, while the national average is 7.9 percent. And private, non-profit schools have a default rate of 4 percent, compared with the national average of 7.5 percent.
According to a Star Tribune report, roughly one in seven students who borrowed federally backed money to attend public two-year colleges is behind on loan payments.
And at Minneapolis-based online school Capella University, nearly 1,000 student debtors—or almost one in 10—are reportedly behind on payments.
But Capella University spokesman Mike Buttry told the Star Tribune that comparing Capella’s 963 defaulting students to the 649 defaulting students at all of Minnesota’s private four-year colleges was “not apples to apples” because Capella’s student body, at 36,000 students, is much larger.
Buttry also pointed out that because Capella is an online school with a national student body, the students in default “are not all Minnesota students.”
“Our rate of default is well below average for for-profit schools,” he added.
Tricia Grimes, a policy analyst with the Minnesota Office of Higher Education, which regulates the state’s colleges, told the Star Tribune that the state looks at default rates when deciding how often to audit schools, but the actual number of defaulting students is also important because rates alone can be misleading.
To read the full Star Tribune report, click here.