Minnesota's other trade deficit: College students

Minnesota residents are increasingly going elsewhere for their college educations. About 37 percent of Minnesotans who were enrolled as freshmen in four-year institutions in 2004 attended college outside the state, up from 33 percent in 2000. The trend raises questions about how we can keep Minnesota higher education competitive in a national and international marketplace. The answers are important not just to both public and private higher education, but the state’s economy as well.

An off-kilter data picture

Demographic trends are clear: the number of high school graduates produced in Minnesota has peaked and is slated to decline by more than 10 percent in the next decade. In the face of this reality, some in the state higher education community have suggested that we can simply import the college students we need to keep our institutions healthy and our economy vibrant. After all, other states, particularly in the South and West, are growing in numbers of high school graduates. But how realistic is this expectation, given the competitive national market for college students?

In fall 2004, more than 30,000 Minnesota residents were first-time freshmen at four-year institutions in the U.S. Nearly all of them, 27,000, had graduated from high school within the past year, and more than 10,000 of those, or 37 percent, had gone to colleges and universities out of state. That compares to less than 25 percent of freshmen nationally who left their home states to attend college full-time, according to data from the Integrated Postsecondary Education Data Systems (IPEDS) Fall Enrollment Survey.

Meanwhile, only about 6,500 first-time freshmen from out of state enrolled in one of Minnesota’s public or private four-year institutions. The difference, 3,568 students, makes Minnesota a net exporter of college freshmen among new high school graduates.

Counting all new freshmen attending four-year institutions, including those who graduated from high school in prior years, Minnesota’s net exports in 2004 amounted to 4,081 freshmen. And that number has grown significantly since fall 2000. In that year, also according to IPEDS data, Minnesota’s net export of freshmen to four-year institutions in other states was only 2,643. This means that the state’s net exports increased by 56 percent in four years, during which time the number of high school graduates in Minnesota increased by only 4.6 percent (public schools only, according to data from the Minnesota Department of Education).

Interpreting the imbalance

What does this say about the competitiveness of our colleges and universities in the national marketplace? What about the desirability of Minnesota as a destination for educated members of the next generation?

Most of the trade imbalance is attributable to public colleges and universities. Minnesota exported 3,149 more freshmen to public institutions in other states in 2004 than it imported to publics, up 28 percent from 2,454 freshmen in fall 2000. The vast majority of those students (70 percent) went to just four states: North and South Dakota, Wisconsin and Iowa. Only six states sent more public college freshmen to Minnesota than they received. On the private, non-profit side, Minnesota sent 932 more freshmen to other states than it received, up from just 169 in fall 2000. The top four states to which Minnesota had a net loss of private college freshmen were Iowa, Massachusetts, Illinois and New York.

Despite the trends, Minnesota's private institutions are still doing a far better job at keeping resident freshmen in the state than the publics are, relative to the national averages.  In 2004, a Minnesota resident freshman attending a public four-year institution was 2.5 times more likely to do so out of state than the national average.  Minnesota residents attending private non-profit institutions, on the other hand, were 21 percent more likely to do so in-state than the national average.

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