Minnesota launches refinancing program to relieve student debt
Minnesotans struggling with high student debt and monthly payments can now get some assistance from their state government. Launched in January, the Self Refi program is the result of legislation (HF 3172) passed in 2014. That law gave Minnesota’s Office of Higher Education the authority to refinance student loans through the sale of revenue bonds.
Five-, 10- and 15-year loans will be available, with current interest rates ranging from 3 percent for a 5-year variable to 6.95 percent for a 15-year fixed rate. According to the Minnesota governor’s office, a graduate with $40,000 in student loans at an 8 percent interest rate could save as much as $200 per month. To be eligible for the program, the borrower must be a state resident and meet certain credit criteria (or have a credit-worthy co-signer). In a 2015 study of student-loan refinancing, the Minnesota Office of Higher Education listed Iowa and North Dakota as other states with similar programs in place.
In every Midwestern state, most students graduate from college with debt. Their average debt load ranges from $25,521 in Kansas to $31,579 in Minnesota, the Institute for College Access and Success reports. Between 2004 and 2014, the average debt for U.S. students rose at more than twice the rate of inflation.
|Stateline Midwest: February 2016||2.03 MB|