The Facts on Student Debt

From Minnesota Alumni Magazine Spring 2016

By Eric Kaler


We at the University of Minnesota are defying the national narrative around student debt. Our story is filled with fewer students in debt and reduced debt for those who need to borrow. Our success is tied to dramatically improved four-year graduation rates and our aggressive investment in financial aid for those who need it most.

Horror stories dominate the media, such as the $100,000 debt hanging like an albatross around a student’s neck, forcing her to work two low-wage jobs to pay it off. Or the young graduates who can’t afford mortgages and delay starting families because of loan burdens.

Unfortunately, these anecdotes scare some families into believing their children can’t afford to attend the University. But nothing could be further from the truth for most families, even the lowest income ones.

  • For students at the lowest income level, we provide $15,335 in need-based aid—that is, without any loans—which is nearly $1,500 more than tuition and fees.
  • Forty percent of all of our Twin Cities undergraduate students graduate with zero debt from University sources—and if they graduate in four years, then it’s 42 percent with no debt. Of the 60 percent who graduate with debt, the average last year was $26,091—down almost $1,500 per student since 2011.
  • Those who completed their undergraduate degrees in four years graduated with an average debt of $24,966—20 percent less than the $31,000 average for students at other colleges statewide.
  • Horror stories? Our most recent graduating class of 7,387 students had a grand total of four students with debt of $100,000 or more. Four.

Don’t get me wrong, facing $25,000 of debt is daunting. But that didn’t purchase a product with depreciating value, like a new car. A four-year college degree in 2016 appreciates: It’s worth at least $1 million more than a high school diploma over the course of a person’s career. I’d take that 40:1 return on investment any day.

How did we defy the national narrative? We emphasized the importance of graduating in four years because, on average, student debt increases nearly 20 percent for those who take five years to graduate. With the help of the legislature and governor, along with a two-year tuition freeze, over the past five years we held tuition increases below the rate of inflation. Including loans, we provide $500 million a year in financial aid. We organized course offerings to ensure students can get classes they need to graduate on time, and we waived tuition for credits beyond 13 per semester; students now are averaging 15 credits per semester. We increased advising to keep students on pace to graduate, saving them a total of $7.7 million in potential loan debt over four years. No wonder our four-year graduation rate has more than doubled over the past 15 years to 63 percent—and is rising every year.

Which leads to Convocation, our annual celebration for incoming students. As they enter Mariucci Arena we hand each of them an envelope. Inside they find maroon-and-gold tassels with a charm that simply states the year of their graduation date, always four years hence.

My message to students is clear: We’re thrilled you’re here, and we want your experience to be filled with academic excellence, maturity, and fun. But four years is the goal because it limits debt.

Of course we have work to do to continue to defy the national narrative. As is true for so many things, it’s better in Minnesota.


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