New program allows Minnesota graduates to refinance student debts
Today, Minnesota launched a state-financed program that will give Minnesota residents the opportunity to refinance student loans.
Student debt is crippling for many Minnesota residents, making the state the fifth highest in the nation for student loan debt. According to information released in a press release by Lieutenant Governor Tina Smith, a typical student carries approximately $32,000 in school loans.
“If a student is graduating with such a high debt load, it makes it difficult for them to do more in the economy,” Smith said in a phone press conference. “If we want to have an economy that works for everyone in Minnesota, we cannot allow these high debt loads to put a crunch on our competitiveness.”
The SELF Refi program, announced by Smith and Higher Education Commissioner Larry Pogemiller, will assist students locked into high-interest private loans by reducing monthly payments and lowering debt. Financed by bond sales, the program does not rely on Minnesota tax dollars.
The program is a result of the 2014 legislative session, where a law was passed giving the Office of Higher Education authority to refinance student loans through the sale of revenue bonds.
To be eligible for the SELF Refi program, borrowers must have completed at least one postsecondary program and be Minnesota residents. To qualify, students must also meet certain credit criteria or have a creditworthy cosigner. Bill sponsors assert that 50 to 60 percent of residents with school debt will be eligible.
Pogemiller sees this as a long-term solution to the overarching problem of crippling student loans. “If this program is successful, we are optimistic it can be expanded to include more student loan borrowers in the future,” he said.
More information on the program is available at: www.selfrefi.state.mn.us.