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Student Loans

Minnesota Student Loans, Scholarships, and Grants

Updated Jun 02, 2021   |   7 mins read

In Minnesota, college is expensive. It ranks tenth in the U.S. in terms of average student loan debt. Students graduate with an average of $31,231 in debt, and close to 70 percent of all graduates of four-year institutions leave school owing money.

Although you may have to borrow to fund your education in the North Star State, you should look into scholarships and grants first because you won’t have to repay that money. When it comes time to take out loans, choose federal student loans first because these loans come with Public Service Loan Forgiveness options, income-driven repayment plans, and important borrower protections. Then, look to private loans to fill in the gaps.

If you’re not sure where to start when it comes to finding scholarships, grants, and loans, this guide to Minnesota sources of educational funding will help make it easier for you.

On this page:

Getting Financial Aid for College

If you’re interested in getting government loans and certain scholarships or grants to help fund your education, you’ll need to start the process of applying for aid by completing the Free Application for Federal Student Aid (FAFSA).

Your expected family contribution (EFC) is determined based on the information you provide about your family and assets when you fill out the FAFSA. That’s the amount you’re expected to pay for school. Your school takes this into account and puts together a financial aid package with different sources of free aid and loans available.

State-Based Student Loans in Minnesota

Students in Minnesota have many options for in-state student loans including:

  • A SELF Loan from the Minnesota Office of Higher Education: This loan is available to Minnesota residents or students in eligible Minnesota schools. Students must be enrolled at least half-time and must be making satisfactory academic progress. The interest rate for a fixed-rate SELF loan is 6.0%, and the starting interest rate for a variable rate loan is 4.3%. Interest on variable rate loans can change quarterly. Income and credit history do not affect eligibility or interest rates.
  • Loans from your school: For example, the University of Minnesota provides University Trust Fund Loans, which could be worth up to $4,000 for undergraduates or $6,000 for graduate students per academic year. Interest rates vary but could go as high as 7.0%. Some UTFL loans start accruing interest immediately, while others do not accrue interest until after graduation.
  • Private student loans: The University of Minnesota has a FASTChoice tool to help students choose private student loan lenders. You can also seek out Minnesota lenders including the Minnesota Valley Federal Credit Union. The credit union provides up to $5,000 in annual funding, with a maximum of $20,000 total per family. There’s no origination fees or prepayment penalties, and there are multiple options for in-school repayment including deferring payments, making standard payments, or paying interest-only.

Students can also apply for federal student aid, including Direct Subsidized Loans, Direct Unsubsidized Loans, and Parent PLUS Loans.

>> Read More: State student loans

Minnesota College Scholarships

Scholarship funds do not have to be repaid, so students should seek out as much scholarship money as possible. Students have many options for Minnesota scholarships including:

  • The Minnesota Indian Scholarship: Students enrolled at least half-time in an undergraduate program or full time in a graduate program may be eligible for this scholarship if they’re at least ¼ American Indian. Students also must be Minnesota residents and demonstrate financial need. The scholarship is worth up to $4,000 annually for undergraduates and $6,000 annually for graduate students. Students must complete an online application, as well as the FAFSA, and the priority deadline to apply for funds is July 1.
  • The Minnesota Academic Excellence ScholarshipThis scholarship is open to students attending qualifying Minnesota schools. The scholarship covers up to the full price of tuition and fees for each academic year at public institutions and covers the lesser of actual tuition at a private school or tuition costs at comparable public institutions. Students will apply for the scholarship through their college or university if attending a participating school.
  • Minnesota Educational Assistance for War OrphansStudents who have lost a veteran parent as a result of his or her service can receive up to $750 annually from the Minnesota Department of Veterans Affairs. Funding can be used for tuition, room and board, books, or supplies. Students of deceased veterans could also qualify for free tuition for undergraduate programs at the University of Minnesota or Minnesota State Colleges and Universities. To become eligible, students need to contact their school’s financial aid office or the Minnesota Department of Veterans Affairs.

Individual Minnesota schools may also offer scholarship funding. For example, the University of Minnesota has an undergraduate scholarship search tool to help students find scholarship opportunities.

Minnesota Grants for College

Grants are similar to scholarships since funds provided by grants don’t need to be repaid. But, while scholarships could be awarded due to academic merit, other achievements, participation in specific groups or activities, or financial need, typically grants are need-based.

Students looking for grants to help cover costs of Minnesota schools can find many options including:

  • A Minnesota State GrantMost students become eligible by completing their FAFSA, while undocumented students can apply by completing the MN Dream Act application. Students must attend one of 130 eligible schools in Minnesota and can receive grant funding for up to four consecutive full-time quarters or three consecutive semesters each year. Students will need to reapply each year, and eligibility is based on financial need. Grants are worth up to $7,463 at public two-year colleges or $11,812 at private four-year schools. The minimum grant amount is $100 and the average award is $2,401.
  • A Child Care GrantLow-income students with children 12 or under can obtain this grant if they’re Minnesota residents and meet income requirements. Parents of handicapped children qualify if their child is 14 or under. Students must be enrolled in six to 15 credits per term for undergrads or one to six credits per term for graduate programs. The maximum award is $5,200 per eligible child per academic year, and students apply through their school’s financial aid office.
  • The Minnesota Teacher Candidate GrantThis is a grant valued at up to $7,500 per term for eligible students enrolled in Minnesota teacher preparation programs. Students can obtain the grant only during the term when they’re completing a student teaching experience lasting 12 weeks or longer. Students must intend to teach in a specific field or an area where there’s a teacher shortage or must belong to an underrepresented racial or ethnic group. Students apply by completing their FAFSA and demonstrating financial need.
  • The Alliss Opportunity Grant Program for Adults Returning to CollegeStudents with financial need who don’t already have a bachelor’s degree can obtain this grant if they enroll in eligible programs. Minnesota residency isn’t required, but students must meet with an advisor to create a plan to complete a bachelor’s degree. Students can receive between $350 and $1,100 annually and funding may be renewable until the student is enrolled for 150% of the length of their program. To apply, students need to contact their school’s financial aid office.

Bottom Line

You have many different options for grants, scholarships, and student loans. To find the funding you need, check with your school’s financial aid office first, then research other sources of free funding. The less you can borrow, the less of a burden your student loans will be after graduation. So start your search for scholarships and grants early, and make smart choices about which lenders you use.