More University of Minnesota students are graduating without student debt, and those who do go into debt aren’t borrowing as much as they used to.
Twin Cities student borrowing has steadily declined since 2011-12, when 64 percent of new U graduates carried student debt averaging $27,578.
Last year, just 56 percent of graduates had student debt. The average was $25,573, according to a recent report to the Board of Regents.
Officials say multiple factors are coming together. More students are earning college credit during high school, graduating on time and borrowing only what they need amid modest tuition increases.
U students now have access to online personal finance training and one-on-one financial counseling.
Student services director Tina Falkner said the U discourages students from borrowing the full amount allowed by federal loan programs.
“We do find that students now, as we’re trying to have more conversations about financial literacy, are not just taking it because it’s there,” she said.
President Eric Kaler has focused on keeping student costs down since taking office in 2011. While nonresidents pay far more than before, tuition and fees for Minnesota residents are up 13 percent since 2011-12. The state’s per-capita income in that time is up more than 20 percent.
At the same time, gift aid for Twin Cities students is up 20 percent. Roughly two-thirds of that is awarded based on financial need, not academic or athletic merit.
HIGH SCHOOL HEAD START
U students are spending less time in school, too.
The four-year graduation rate has climbed to 71 percent — second in the Big Ten, behind the University of Michigan.
More than 5 percent are graduating in three years, acting provost Bob McMaster said, with a head start from credit-bearing high school programs like Advanced Placement and College in the Schools.
The U is enrolling better-prepared students, too. The latest freshmen class had a record average ACT score of 28.4.
FEWER NEEDY STUDENTS
Another factor could be an increasingly affluent student body. The share of new freshmen receiving income-based federal Pell Grants has fallen each year since 2010, from 23.5 percent to 16.9 percent this year.
That has McMaster concerned the U isn’t as accessible to low-income students as it should be.
“It’s a number that we probably don’t want to see drop any more,” he told regents last week.
PRIVATE LENDING UP
U officials also worry about the growing use of private student loans, whose terms generally are worse than those of subsidized federal loans. Private loans accounted for 19 percent of student debt across the U system last year, up from 11 percent six years earlier.
The true amount of college debt is undoubtedly higher than what’s reported because of data limitations. The amounts given don’t include Parent PLUS loans, home equity lines of credit, family borrowing, credit cards, personal loans or retirement account loans.
Still, the Twin Cities campus seems to be moving in a positive direction compared with the rest of the country.
Between 2012 and 2017, the average debt load for a new U.S. college graduate with debt grew by $800 to $28,650, according to the Institute for College Access and Success. Sixty-five percent of 2017 graduates carried student debt, down from 67 percent in 2012.
As a state, Minnesota ranked ninth in student debt in 2016-17, with 68 percent of graduates carrying an average student debt load of $31,734.