The Minnesota Office of Higher Education monitors debt trends and evaluates state financial aid policies. In Fiscal Year 2016, Minnesota undergraduates received $1.1 billion from federal student loan programs.
Students attending Minnesota's colleges were less likely to default on federal student loans than their peers nationally, according to information published by the U.S. Department of Education. Minnesota undergraduate borrowing has declined slightly in recent years.
Minnesota's Fiscal Year 2015 three-year default rate was 8.3 percent, decreasing from 8.9 percent in Fiscal Year 2014.
Minnesota's three-year default rate among students borrowing at four-year public universities was the lowest in the nation. Overall the state’s three-year default rate ranked sixth lowest compared to other states. Alaska (16.4 percent) had the highest average three-year default rate and Rhode Island (5.2 percent) had the lowest average three-year default rate. Nationally, the Fiscal Year 2015 three-year default rate was 10.4 percent, decreasing from 11.5 percent in 2014. Both in Minnesota and nationally, students attending public two-year colleges were more likely to default than students attending other types of institutions.
The U.S. Department of Education releases official cohort default rates once per year.
A three-year cohort default rate is the percentage of a school's borrowers who enter repayment on certain Federal Family Education Loan (FFEL) Program or William D. Ford Federal Direct Loan (Direct Loan) Program loans during a particular federal fiscal year (FY), October 1 to September 30, and default or meet other specified conditions prior to the end of the second following fiscal year.
Data provided by the U.S. Department of Education includes information on default rates for all students as of September 26, 2018, including undergraduates, graduate students, and those pursuing professional degrees or certificates. Default rates for students attending foreign schools were excluded from this analysis.
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.
More information on the official cohort default rates can be found on the Department of Education website.