What is the University of Minnesota Doing to Reduce Student Debt?

Kim M., Kuverua K., Maddy P., Rain U., Taylor L., Tiana T.


According to Investopedia, student debt is money owed on a loan that is utilized mainly to pay for a student’s tuition; many students take out more than just the expected tuition cost for other expenses such as: housing, books and other supplies, groceries, meal plans, etc. A student ends up having student debt based on the amount of loans they took out while in college. However, with the cost of education rising at a rate of about 10 percent every 8–9 years, going into debt is quickly becoming the only way students can pay for their higher education. Students borrow money from granting establishments and financial organizations to pay for their education. 


The COVID-19 pandemic has worsened student debt in the sense that students are paying the same amount, if not more, for college during the pandemic, but receiving lesser value, services, and support from colleges due to the fact that almost everything shifted to online when the COVID-19 pandemic started. Why pay for things like room and board and then not be able to use them? Therefore, COVID-19 has contributed negatively to the student debt crisis because students borrow so much, pay a lot, and get lesser services and support. 


As many know, student debt has been on a rise in recent years in the U.S., and Minnesota is no different. In 2019, people who lived in Minnesota ranked fourth highest among states in the U.S. and the District of Columbia, with the highest average in student loan debt per state resident. The average student loan debt owed by Minnesotans is around $31k, with the average monthly payment being $250. Compared to other states, the cost of education in Minnesota is also high—colleges and universities in the state tend to charge more for tuition than other institutions around the country. In Minnesota, the average debt for non-profit private schools is around $26k, the highest average being Augsburg at $33k. The average student debt for public colleges is around $26k, the highest being Minnesota State University Moorhead at $27k.


While it can be tempting to say that student loan debt has both good and bad aspects, the outrageous scope of student loans is detrimental to many Americans, leaving many in life-long debt. On one hand, some argue that debt is “good” because it allows individuals to invest in their education and future. Analyses show that, in Minnesota, the annual median wage of college graduates rises as they go through more education. On the other hand, the extent of this debt—stemming from the skyrocketing college tuition prices and stagnant wages—is debilitating for many. Some may say that there is some flexibility in the type and repayment of loans, but even with low interest rates or flexible repayment dates, the end result is the same: individuals who take out loans will be working to pay them off for long periods of time. This ends up being a choice to pick “which of the lesser evils” you choose for a loan. There are no guarantees that college graduates will find a job immediately following graduation. Student loans also count as “credit,” so if they aren’t paid diligently, it can severely impact student’ credit scores, which can influence their ability to open credit cards, rent housing, or get a mortgage. All in all, student loan debt can cause irreparable damage to the future students are working for. 


Obviously one of the great concerns of many students and recent graduates right now is how to manage their student debt, loan payments, and other financial obligations in the midst of a global pandemic. The effects of the pandemic on education and student debt has started a large conversation at the University of Minnesota around what the University plans on doing to help young people. One option for financial support available to students was Student Emergency Funds. These funds were available to individuals who needed additional money to cover their costs of living. Applications were made available during the Spring semester of 2020, with some students receiving early access to the applications due to personal statuses on record (low income, the sole payer of tuition, having lost a job due to the pandemic, etc.). While no students were promised Student Emergency Funds, having the funding available allowed many to better meet their needs in uncertain and tumultuous times. The U of M Board of Regents also approved the Comprehensive Student Fee Refund Plan to reimburse and credit students for fees such as housing and parking, starting from during the first day of the Governor’s order to shutdown (March 28th, 2020) to the last day of finals in May 2020. While some relief is being provided to both students and alumni with student debt, no major student debt forgiveness or necessarily ‘immediate’ relief has been distributed by the University or nationally. The scope of the student debt crisis in Minnesota and nationally makes it clear that systemic change is necessary.


There are a lot of factors that go into the cost of education, and therefore the cost of student loans. Loan providers may try to get you to take out more loans than you need to, because it makes them more money, so here are some things to consider before taking out a loan:

  • Consider non-traditional educational opportunities—A lot of your “general education” classes will be similar, if not the same, no matter what school you go to. Some people choose to save money by taking basic classes at community colleges or through dual-enrollment programs at their high schools. You can save time (and therefore money) at your institution of choice if you start school with half your requirements done!
  • Look for other funding sources—Loans are not the only way you can pay for college. Funding sources like scholarships and grants don’t need to be repaid, and there are a ton of options for different skills sets, majors, geographies, and life circumstances. Do some research on what scholarships or grants might be available to you for being you. (This information is readily available online, and your school’s financial aid office might be able to help you find more.) And if you do need to take out loans, no worries! The Free Application for Federal Student Aid (FAFSA) is an online tool that can help you get grants and loans, based on your income, and help you set them up. Your school may also have work-study programs or on-campus jobs (or off-campus jobs, even) available to help you make some extra money to cover your own costs outside of taking out more loans or opening a credit card. 
  • Research various housing options—While your school may require you to be on campus the first year to build community, there may be a lot of extra fees that come with living on campus. After your first year, however, you may have the option to live off campus with roommates or family, which may be more cost effective. If you have a housing-related scholarship or loan, make sure to check the terms to see if off-campus housing is covered.

This post was written as part of a collaboration between Minnesota Youth Collective and a University of Minnesota class, SW1501. This class, Introduction to Peace Studies, discusses how human conflicts can be resolved in ways that promote justice and peace. Students collaborated with MNYC staff to research and write posts about our issue areas of focus.

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