Posted: December 15, 2004
Contact: Doug Anderson, email@example.com, 651-201-1426
Over the past two years, 30 percent more students have taken out loans to help pay for college, and their total borrowing rose by 60 percent, a new study by the Minnesota State Colleges and Universities has found.
"We are terribly concerned with the rapid escalation of student debt and what it means for the ability of these students to get a good start on their careers and family lives," said James H. McCormick, chancellor of the Minnesota State Colleges and Universities system.
"Double-digit tuition increases in the past several years clearly are driving more students into debt at a greater level," McCormick said. "Minnesota legislators and citizens need to know about this impact of the state funding cutbacks to higher education."
The study, comparing student borrowing in the 2001-2002 academic year with in 2003-2004, was presented to the Board of Trustees at its meeting Tuesday and today in St. Paul. During that same two-year period, tuition rose from $2,541 to $3,179, an increase of 25.1 percent.
Among all students enrolled in credit courses in the 2003-2004 academic year, 32 percent had borrowed money that year to pay for college.
The research showed that during that two-year period, the number of students enrolled in the Minnesota State Colleges and Universities who borrowed rose from 58,819 to 76,549, an increase of 30 percent, and the total borrowed rose from $250.1 million to $401.7 million. The average amount that students borrowed increased by 23 percent, from $4,267 to $5,247.
"This student debt information adds to the urgency of our legislative request for additional funding so that we can keep tuition increases as low as possible over the next two years at the Minnesota State Colleges and Universities," said Board of Trustees Chair Robert H. Hoffman.
These recent trends in student borrowing suggest that the system will continue to see increases in the debt burden of students at graduation and the number of students with loan debt during the next several years, the report found.
Graduates of the state colleges and universities in 2002 had a median debt burden of 4.1 percent, meaning that 4.1 percent of their monthly income went for student loan payments. About 47.2 percent of all 2002 graduates in the system had borrowed money from state or federal loan programs for college; comparable figures are not available yet for 2004 graduates.