More Minnesota residents are defaulting on their student loans within the first three years of leaving school.
Still, the state's failure rate of 11 percent is better than the national average of 14 percent, Minnesota Public Radio News reported.
State Office of Higher Education analyst Tricia Grimes said the economy should be considered when looking at the numbers.
"Keep in mind they include students who were supposed to go into repayment when the economy was particularly bad," she said. "As the new rates come out in the next year and the year after, they may be better because they include more time when the economy was better."
Borrowers from public two-year colleges are among the hardest hit, defaulting at an average rate of 18 percent. That's higher than the 11.3 percent rate for the state's for-profits.
Grimes said the default rate among students from two-year colleges is a concern because a large portion of Minnesota students are enrolled in those schools, but she added: "a number of the public twos that have the highest rates are in parts of the state where there was a mining and forestry or forest-products industry. And those were particularly hard hit in this recession."
This year's report tracks borrowers who were to begin repaying their loans during the 2010 federal fiscal year. Last year's tracked those who started in 2009. The average default rate last year was 9 percent.
Trenda Boyum-Breen, chief academic officer at Rasmussen College, said the school has taken steps to lower its default rates. Among them, the college has become more selective about who enrolls, and it has instituted orientation programs to ensure students are prepared. Boyum-Breen said that has led Rasmussen to deny enrollment to 20 percent of its applicants.
In January, Rasmussen also instituted tuition cuts that in Minnesota averaged 18 percent, which she said should reduce student debt and make it easier for them to make payments.