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Minnesotans have among the highest student loan debt in the nation

Among the problems: Schools here cost more, and the Legislature has alligator arms.

Among the problems: Schools here cost more, and the Legislature has alligator arms. Juan Ramos

Welcome to Minnesota, where the number of lakes and the student debt levels are both higher than average.

At the end of 2017, Americans owed over $1.38 trillion in student debt -- that’s “trillion” with a “T.” Worse, Minnesota is among the top 10 states for its percentage of students carrying debt (between 45 and 60 percent), according to data from the Urban Institute.

By comparison, neighbors North Dakota and Iowa have a lower 35 to 45 percent ratio. California, which has long been among the leaders in subsidizing college, rates the lowest at 20 to 27 percent.

There are a few reasons for Minnesota's unimpressive rankings, according to Minnesota Higher Ed’s Meredith Fergus.

In general, Minnesota has a higher percentage of kids attending college. The state is second in the nation for the percentage of adults earning an associate degree or higher (48 percent). Most of the students going to college now have parents who also went to college, which places a higher premium on getting a degree.

It also means that students and parents feel a little more confident about their ability to pay loans back. After all, mom eventually paid off her degree, so her daughter feels better about taking out a loan.

But a lot of it comes down to this:

“We have higher tuition,” Fergus says.

The University of Minnesota’s tuition is about 83 percent higher than the national average for a four- year college, which is $6,841 per year. The school's average student ends up $26,000 after obtaining a bachelor’s degree.

Then there's the cheapskates in the Minnesota Legislature, who offer miserly state appropriations to higher education. Minnesota spent $3,876 per student on higher education in 2013-14, as compared to Wisconsin’s $12,432.

This wasn’t always the case. Minnesota used to be in the top 10 in per capita taxpayer support from the mid-‘70s to early 2000s. It has since fallen to the middle of the pack, and isn't close to keeping up with inflation.

Fergus says Minnesota’s policy is to trust that students will foot the bill for a more expensive education. In short: tuition is high because people are willing to pay for it.

On top of that, student loans in generally are pretty easy to get. Minnesota state loans require a credit-worthy co-signer, but all you need to do to get a federal loan is fill out a FAFSA -- which, Fergus says, most 18-year-olds are more than capable of doing.

“It’s not like home ownership, where you have to prove you’re credit-worthy,” Fergus says.

There is some hope on the horizon, in a bittersweet kind of way. Fergus thinks the cost of education is going to keep going up, but overall, she thinks students are getting savvier and finding ways to borrow less by spending less time in college and looking for grants and scholarships.

And degrees still matter in this economy, she says. The higher level of education you get, the better your chances of getting employed and earning more in the long run.

But when it comes to student debt, she doubts Minnesota will ever be far from the top of the list.