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The two-year default rate for students at the Arts Institutes was 8.3 percent, a little higher than the state’s average.
In a statement, a spokeswoman said the college’s default rate “compares favorably to the … default rate for all higher education institutions in Minnesota, regardless of sector.” The Art Institutes International Minnesota, owned by Education Management Corp., has not increased tuition since October 2010, the statement said. “Student debt is a shared concern across all colleges and universities.”
Education Management is being sued by the Minnesota attorney general’s office, along with the U.S. Department of Justice and a few other states. The 2011 fraud suit alleges that the schools paid incentives to recruiters based on enrolling new students, making the schools ineligible for billions in state and federal financial aid.
One student’s struggle
Kira Welle took out a mix of federal and private loans when she started at Winona State University in 2007. It “snowballed from there,” she said.
She worked when she could — at a Chrysler dealership, an independent bookstore, the Mall of America over holiday break. She shopped at Goodwill. She culled her grocery cart before checking out. “I’m very frugal,” Welle said. “I know how to make things last.”
But a year after graduating, she owes about $80,000 — with all the different lenders, she’s not quite sure. Welle works at Life Time Fitness and lives with her parents in Eagan. The debt makes her “very, very anxious,” but she’s not sure of the alternative.
“Seriously, what would I have done if I had not gone to school?” she said. “I think about the papers I’ve written and the people I’ve met.”
Welle borrowed more than is typical at Winona State. About 70 percent of the 2010 class left with debt, the report says, with a total averaging $27,200. That’s below the state average, but highest among the seven state universities of the public Minnesota State Colleges and Universities system.
The total is “very concerning,” said Winona State President Scott Olson. He attributes some of the rise in debt to cuts in state funding. From 2002 to 2012, Winona State lowered the cost of educating a student by 9 percent, after adjusting for inflation, he said. Like other leaders, he’s eager to see whether a Legislature-funded two-year tuition freeze for in-state public college undergraduates pauses the steady rise in student debt.
Although Winona State students’ debt is higher, just 2.5 percent of its borrowers defaulted on their loans within two years, according to the new report — the smallest share of those seven state universities.
“The fact that we have this very low default rate tells me these students are getting jobs, being successful,” Olson said. “In a sense, the debt was a good investment.”
Jenna Ross • 612-673-7168