The debt hole that Minnesota college students have been digging themselves into has stopped getting deeper.
The Minnesota Office of Higher Education reported that Minnesota college graduates carried a median debt of $27,300 last year. That's down just over $200 from 2012, when the average student graduating with a bachelor's degree carried $27,517 in school loans. All told, student loans in Minnesota declined from $1.445 billion in 2011 to $1.36 billion in 2013.
The state report, Cumulative Student Loan Debt in Minnesota 2011-2013, was released Monday. It shows that 70 percent of Minnesota college students borrow to pay for college. That's the fourth-highest borrowing rate among college students in the country, according to the Institute for College Access and Success.
The Star Tribune noted that the findings mark the first decline in student debt since the state started tracking the numbers in 1987. The drop could mean that "student borrowing may be starting to level off after decades of record-breaking increases." But the newspaper story also suggested that some students, particularly those from low-income families, may not be attending four-year colleges and universities because of the escalating cost of higher education.
The new state report also noted that Minnesota college students are better at paying off their loans than their counterparts across the country, with one of the nation's lowest default rates – 11 percent.
Earlier this month, USA Today included Minnesota in a story titled, "10 states with the most student debt." Minnesota was fourth on the list, and the only state in the top 5 that was not in the northeast. The story used 2012 data compiled by the Project on Student Debt, part of theInstitute for College Access and Success. It noted that student debt totals in Minnesota rose by 61 percent between 2004 and 2012, from an average of $19,580 to an average of $31,497.
The Associated Press recently reviewed national data that might make it clear why students are willing to take on school loans. The story looked at findings from the U.S. Education Dept. The report found that college graduates report lower unemployment rates compared to the national average. It also found no earnings gap in the graduates of public and private colleges, with both reporting earnings of about $50,000 a year. The 16 percent of students who earned undergraduate degrees in science, technology, engineering or math averaged $65,000 a year compared with $49,500 for graduates in other fields of study.
The findings are based on a survey of 17,110 students conducted in 2012, four years after student respondents obtained bachelor's degrees.