The average debt was $29,800. For-profit colleges and two-year degrees were included.
Minnesota college students have long been marked as some of the nation’s most indebted. Turns out it’s even worse than we knew.
The most complete picture of student loan debt in the state shows that 2010 graduates who borrowed had an average load of $29,800.
That total beats a previous estimate, probably because for the first time the number includes for-profit colleges. Their graduates borrowed more — $45,100, on average.
The new report from the Minnesota Office of Higher Education is part of a national push for better information about college graduates’ growing debt. Minnesota’s numbers are some of the most complete in the country, experts say.
The report also gives a first look at student loan debt for two-year degree earners. There, too, graduates of for-profit schools bore more debt, about $26,900, compared with $14,700 at public two-year colleges.
Together with default rates, which indicate whether graduates are paying back that debt, the data illustrate the burden and spotlight colleges where students are most indebted.
Students at the Art Institutes International Minnesota left with the state’s biggest debt loads for two- and four-year degrees. Nine out of 10 of its associate-degree recipients had debt, with an average of $36,100. The average for bachelor’s degrees: $55,200.
Julia Fristedt said she knew that attending the Art Institutes would be pricey and that the for-profit school’s agenda “is not purely education.” But she believed it would be worth it for the small class sizes and downtown Minneapolis campus, she said.
This week, Fristedt is brushing up and binding her portfolio. She will graduate with an interior-design degree and about $32,000 in student loan debt. Her parents took out another $20,000 in federal parent PLUS loans, she said. (Parents’ loans are not included in the state numbers.)
It’s a big total, but she feels well-prepared to enter the job market, she said. Just this week, her instructor passed along a job opening that could be a good fit. “That’s what I mean about how awesome these teachers are,” she said.
‘Plenty of holes’
For years, the best look at student debt by state has come from the Project on Student Debt, by the nonprofit Institute for College Access and Success. It found that Minnesota’s 2011 graduates who borrowed finished with an average debt load of just less than $29,800, third-highest in the country.
But that report doesn’t include for-profit colleges and some other schools. Last year in Minnesota, for example, numbers for Dunwoody College of Technology and Metropolitan State University went missing. The federal government has a new college “scorecard,” but its debt numbers include students who dropped out. So colleges with lots of dropouts might look like a better deal than those where most students graduate.
“There are plenty of holes left to fill when it comes to debt data,” said Lauren Asher, president of the Institute for College Access and Success. “It sounds like Minnesota is taking a step in that direction.”
The new report emphasizes default rates alongside debt numbers. While a big share of Minnesotans borrow — and in large amounts — they’re also more likely to repay. About 6.9 percent of Minnesota students defaulted on their loans within two years of entering repayment, compared with 9.1 percent nationally.
“While many students may be experiencing difficulty repaying, they seem to be managing it somehow,” said Tricia Grimes, policy analyst for the Office of Higher Education.
Minnesota students at for-profit colleges are less likely to default than those at public two-year colleges. Nationally, the reverse is true.