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Undergraduate students attending Minnesota's two- and four-year colleges were less likely to default on federal student loans than their peers nationally in the 2007-2008 academic year, according to information published recently by the U.S. Department of Education. But Minnesota undergraduates were more likely to borrow than students in other states.
Fifty five percent of Minnesota undergraduates took out student loans in 2007-2008, compared to 39 percent of undergraduates across the country, and 47 percent of undergraduates from Midwestern states. The federal student loan default rate for students attending Minnesota institutions was 3.7 percent, compared to 7.0 percent nationally and 6.6 percent for peer Midwestern states.
A report released today month by the Minnesota Office of Higher Education outlines federal student loan default rates, by institution, for students attending Minnesota's public, private and for-profit institutions. The report also includes general borrowing trends for the most recent year available, which is the 2007-2008 academic year.
"Minnesota's student loan default rates have been consistently low for many years," said David Metzen, director for the Minnesota Office of Higher Education. "It may be attributed to Minnesota's economy, and the capacity of graduates to find jobs and begin paying back their loans. For those colleges with lower default rates, it may be a reflection of effective and thorough financial aid counseling."
"We care about these numbers a great deal because when a student defaults on a federal loan, it is typically a sign that they did not complete their program, or completed but could not find a job in their field," Metzen said. "That's a failure for all of us."
Colleges and universities with consistently high student loan default rates over a period of three years may be denied participation in federal and state financial aid programs for their students. No institutions in Minnesota have been denied participation in recent years.
Student Loan Default Rates in Minnesota, 2008 [.pdf] is available online.