MSU Campus

Montana Hall and the Michael P. Malone Centennial Mall are pictured in this Chronicle file photo.

Montana's state colleges remain a bargain compared to other states, but students who take out loans are still graduating with a record $26,440 in loan debt.

A new report on affordability shows that the cost of college tuition and fees at the Montana State University and the University of Montana flagship campuses has jumped 55 percent in the last 10 years, from $4,125 for freshman year to $6,400.

Yet other states have raised tuition as much as 200 percent over the decade, said Tyler Trevor, deputy commissioner for planning and analysis. Trevor will present his affordability update to the Board of Regents at their meeting next week in Havre.

“We've gone up the last 10 years at probably a slower pace than any state in the nation,” Trevor said. “It's still a bargain compared to other states.”

When the Great Recession hit, many states slashed their funding for higher education, so colleges imposed steep tuition hikes. Among 14 Western states, the average increase was 110 percent.

Thanks to Montana's freezing tuition some years and relatively modest tuition hikes in others, this state's cost of education has gone from above to below the average for Western states.

So if it's such a bargain, why is Montana student debt still climbing?

One reason is that Montana is 10th from the bottom when it comes to states providing financial aid money for needy students. Montana colleges get about $5 million in need-based aid from the state treasury, compared to $70 million in federal Pell grants.

Another reason is that Montanans' household income is relatively low, so more students whose families can't afford to help end up taking out loans.

Yet another reason is that while tuition may be frozen some years, it's only about one-third the cost of a year in college, and the other two-thirds — housing, books, fees and other expenses — keep rising.

The total cost of freshman year at MSU and UM for Montana students has jumped over the decade from $9,829 to $15,081.

“The sticker price is pretty shocking to people,” Trevor said.

That's offset for some students by financial aid. Counting just grants and scholarships – that don't have to be paid back – financial aid averages $4,580 a year at the flagship schools.

However, that's somewhat deceptive, Trevor said, because most financial aid money doesn't help “average” students. Pell grants go to poorer students, scholarships go usually to the brightest students, while those from average-income families, with average test scores or average athletic ability are left to take out loans.

Fifty-eight percent of freshmen take out student loans, averaging $5,579 for the first year. In 2013, the average Montana student graduating with a bachelor's degree left college with $26,440 in student loan debt, a stiff increase of $5,315 from four years ago.

Students from low-income families who qualified for federal Pell grants borrowed the most — $29,024 on average. Students without Pell grants averaged $21,466.

Montana University System students and parents borrowed a total of $223 million for college in 2013 — more than double the amount of a decade ago.

One key step the University System has taken to deal with the growing burden of student debt, Trevor said, is increasing financial literacy education at each campus. Students start getting information about loan debt from their first orientation sessions — right along with the training on drugs and alcohol, Trevor said.

Gail Schontzler can be reached at gails@dailychronicle.com or 582-2633.

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