The Free Press, Mankato, MN

Local News

March 30, 2013

Financial aid offices warning students about rising interest rates

Interest rates on some student loans set to double



“What we do here is we encourage students to only borrow what they need, not necessarily what they’re eligible for,” she said in November.

A study released last fall by the Institute for College Access and Success in California that looked at 2011 graduates nationwide showed that Minnesota graduates have the third-highest amount of debt in the U.S. — about $29,800, compared to the national average of $26,600, according to the study. (Only New Hampshire and Pennsylvania grads had more debt.)

Among public schools in the state, MSU had the third-highest student-debt load: $29,415, which is greater than St. Cloud State University ($28,819), the University of Minnesota-Twin Cities ($28,407) and Southwest Minnesota State University ($26,394).

School financial aid officials say they do everything they can to provide loan counseling and make sure students are aware of how easily debt can mount.

Dinse said SCC offers a variety of scholarships that can help with educational funding and lessen the need for student loans. She said there has been a 30 percent increase in scholarship applications as students look to alternative resources for college costs.

“(The) reality is that many students will still use this as a source of funding their educational expenses despite the interest rate,” Dinse said. “... Frankly, more students will have to work more and take less credits.”

Dinse said SCC is holding Free Application for Federal Student Aid (FAFSA) help sessions on campus, during which students are being informed about the rate hikes. They’re also being provided information about work study, scholarships and the federal Pell Grant program, which all can lessen student-loan needs.

Dinse said award letters for all means of funding go out during fall registration time when tuition has been set and the interest-rate information has been determined.

— The Associated Press contributed to this report.

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