Richmond Public Schools seniors outside their graduation ceremony. (Ned Oliver/Virginia Mercury)
Nearly two-thirds of Minnesota students who graduated with bachelor’s degrees last year have student debt, and those who took out loans owe an average of $24,000.
Students earning master’s and doctoral degrees take out loans less frequently, but when they do, they borrow more money than undergraduates, according to a Minnesota Department of Higher Education report.
Many students at for-profit universities, meanwhile, are beset with a financial albatross when they finish: Bachelor’s students at for-profit universities take on the most debt by far — 85% of students graduate with loans, with a median cumulative debt of more than $39,000.
There’s some good news: Overall, since 2012, the median debt for Minnesota students earning associate’s and bachelor’s degrees has decreased by more than 10%.
Minnesota college debt could soon decrease even more starting in 2024 as the state’s new North Star Promise scholarship program kicks in, after the DFL-controlled Legislature passed it into law earlier this year. The program will cover tuition and fees for students whose parents make less than $80,000 per year — just above the median household income for Minnesota.
After a years-long pause on payments during the pandemic, student loan payments restarted on Oct. 1. A Biden-administration plan that would have canceled loans up to $20,000 per person was tossed out by the Supreme Court earlier this year.
In response, the administration announced in early October that it would adjust income-driven repayment plans and expand programs to retire college debt of public sector workers like teachers and police officers.
In Minnesota, 15,400 borrowers have had nearly $1 billion in loans discharged through the Public Service Loan Forgiveness programs since October 2021.
MDE’s median loan data excludes students who did not graduate and students who did not take out loans.
Students attending private universities are more likely to take out loans than public college students. In 2022, 68% of students graduating with bachelor’s degrees from private nonprofit universities took out loans, compared to 64% of students in the Minnesota State University system and 54% of students at the University of Minnesota.
About 62% of students who start a four-year degree program graduate within six years, according to the National Student Clearinghouse Research Center.
Gov. Tim Walz signed an executive order Wednesday eliminating four-year degree requirements from 75% of state jobs.
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