Students who graduated from Minnesota’s colleges and universities last year carried $5,414 more debt on average than a graduate in 2005. And the percentage of those burdened with the debt rose during the same period from 68 percent to 72 percent, according to a report [PDF] from the Project on Student Debt.
The average debt load for a Minnesota graduate in 2008 was $25,558, which is a 27 percent increase over 2005.
You didn’t need to graduate with a math degree to relate those numbers to trends in tuition and taxpayer support for the state’s colleges and universities.
Between the years 2000 and 2007, in-state tuition increased by 68 percent at the University of Minnesota and 55 percent in the Minnesota State Colleges and Universities (MnSCU) system, according to the Minnesota Budget Project, an initiative of the Minnesota Council of Nonprofits.
Meanwhile, state funding per full-time higher-education student dropped by 28 percent during the same period. And state grants, as shown in the chart below, did not rise as tuition soared.
If anything, those trends accelerated this year. Tuition rose again, while state higher-education funding was cut in the face of state budget shortfalls.
More debt, fewer jobs
For last year’s new graduates, the problem of the extra debt was compounded by the toughest job market in decades.
Employment prospects for young college graduates soured along with the economy, the Project on Student Debt noted in its report.
“The unemployment rate for college graduates aged 20-24 was a challenging 7.6 percent in the third quarter of 2008, the highest third quarter rate since 2002; by the third quarter of 2009 it had risen to 10.6 percent, the highest on record,” the report said.
Minnesota students aren’t alone in digging themselves into debt to pay for their degrees. Student debt rose nationwide in 2008 to an average of $23,200 per student.
Minnesota ranked 6th among the high-debt states in 2008, the latest year for which the analysis is available. The District of Columbia led the nation, followed by Iowa, Connecticut, New York and New Hampshire. The lowest debt states were Utah, Hawaii, Kentucky, Wyoming and Arizona.
In terms of the students needing loans, it is not surprising that they tend to come from low-income families. Pell Grant recipients, who generally have family incomes under $50,000, are much more likely to borrow and to borrow more, the report said. Among graduating seniors who ever received a Pell Grant, 87 percent had student loans in 2008. Those Pell Grant recipients had an average debt of $24,800 — nearly $2,000 more than the average for all seniors graduating with loans.
Students who choose private institutions also tend to pile up more debt. That’s not true across the board, though.
As the chart above shows, graduates left Carleton and Macalester colleges in Minnesota in 2008 with lower average debt loads than their counterparts at many public colleges and universities.
Sharon Schmickle reports on science, international affairs and other subjects for MinnPost.