Student debt at the University of Minnesota is trending down as more students are completing school on time and the university has increased its gift aid.

Average debt among graduates who borrowed money for college hit a nine-year low last year, at $25,573 for the Twin Cities campus. Another 44 percent had no debt, up from 36 percent a decade ago.

The trend coincides with a number of positive indicators for the university, including record high ACT scores for new students and a four-year graduation rate that hit 71 percent last year — up from 45 percent a decade prior.

“From the moment a student steps on this campus, they’re told the expectation is they’re getting out in four years,” Vice Provost Bob McMaster said.

The state of Minnesota ranks ninth in average student debt among bachelor’s degree recipients, at $31,734 in 2017, according to the Institute for College Access and Success. University of Minnesota graduates hold that average down.

By one measure — average net price for freshmen — the university's five campuses are the most affordable four-year colleges in Minnesota, administrators told the Board of Regents on Thursday, Sept. 12.

“This is exactly where we want to be as a system,” Student Finance Director Tina Faulkner said.

Since 2001, as state government support has waned, the university has raised resident tuition by more than 11 percent per year. During that same period, however, gift aid given to Twin Cities students has grown by 23 percent per year.

“Yes, tuition’s gone up, but the university has redoubled its efforts and made sure that we’re backfilling that plus with lots of gift aid,” McMaster said.

For the first time last year, Twin Cities undergraduates received more money through gift aid than through loans — $175 million to $170 million.

Regent Darrin Rosha said the data are misleading because the university has used gift aid, in the form of tuition waivers, to offset high tuition increases for non-resident students.

“The best financial aid is low tuition,” he said.

Tuition growth slowed substantially since 2013 under Eric Kaler, who left the presidency this year. Rosha and other regents have consistently pressed the administration to hold resident tuition down while raising nonresident rates.

McMaster said the university’s affordability strategy is now turning to reducing the cost of books, expanding private scholarships and improving retention and graduation rates for disadvantaged students.

He’s also watching a recent increase in Parent PLUS loans, which indicates parents are taking on debt so their kids don’t have to.

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