The Big Story Blog

Where are the most serious student debt problems?

Posted at 11:14 AM on October 27, 2011 by Paul Tosto
Filed under: Education

We're talking today about the fast rising levels of debt students are taking to attend college -- and the financial hardships that often follow.

But let's step away for moment from the larger policy discussion about President Obama's latest moves and look at some numbers. What you find is that not all student debt problems are alike.

Data show much of the crippling debt problem is focused on public community colleges and for-profit career schools, not the public or private four-year universities that typically charge the highest tuition.

Minnesota's a good example of this when you examine student loan delinquencies.

I'd argue that's the best statistic to examine if you're interested in looking at the struggles of people who can't afford the school debt they took on to attend college. For whatever reasons, the investment in college didn't pay off to the point where the student could pay the debt.

The most recent report from the Minnesota Office of Higher Education shows that more than 80 percent of student loan delinquencies came from student who attended public two-year colleges and for-profit career schools.
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Those institutions generated more than 80 percent of the delinquencies but represented only about 40 percent of the Minnesota college enrollment in 2008 (I excluded online career schools in that calculation since we don't know if those students are learning in Minnesota).

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There's no doubt that private colleges can be expensive and the University of Minnesota is one of the most expensive flagship universities in the country for in-state tuition.

But is it time to refocus the questions about student debt on institutions that make up about 40 percent of Minnesota higher education enrollment but are responsible for more than 80 percent of loan defaulters?


About Paul Tosto

Paul Tosto

Paul Tosto writes the Big Story Blog for MPR News. He joined the newsroom in 2008 after more than 20 years reporting on education, politics and the economy for news wires and newspapers across the country.