Minnesota’s public school system is carrying a heavy price tag, as debt per student reaches more than $20,700 and pushes total school borrowing to $16.5 billion.
Number crunching by the Reason Foundation found that in 2023 Minnesota’s school districts carried an average of $20,718 in debt per student, with total outstanding school debt reaching $16.5 billion statewide. This represents a 38.2 percent increase in inflation-adjusted per-student debt since 2002.
Debt and capital outlay trends
The data from the Reason Foundation’s “Spending Spotlight” project highlights how school districts have increasingly relied on long-term borrowing over the past two decades.
This rising debt load develops primarily from the issuance of bonds to finance school construction, renovation, and other capital projects. Voters in many Minnesota communities get asked to routinely approve bond referendums to fund new facilities or upgrade buildings, and these measures increase the amount districts owe over time. And now due to a law passed by the 2023 DFL-controlled legislature, Minnesota school boards can bypass their residents and renew an expiring referendum. These bonds are usually repaid over many years through local property taxes and, for qualifying districts, state debt service aid.
The reported 38.2 percent inflation-adjusted increase in debt per pupil from 2002 to 2023 suggests that Minnesota districts are now carrying substantially more capital obligations per student than they did two decades ago. This debt reflects a trade-off: While borrowing allows districts to spread large capital costs over time, it also commits future taxpayers to long-term obligations and reduces flexibility in future budgets. These future taxpayers pay for decisions made today, even as educational needs change.
Compared to our neighboring states, Minnesota’s total school district debt per student is around double — Wisconsin’s is at $10,806 per student, South Dakota’s is at $10,673 per student, Iowa’s is at $10,282 per student, and North Dakota’s is at $8,025 per student.
Looking ahead
While there is broad agreement that students need safe and functional schools, disagreement centers on how much debt is appropriate and who should bear the cost. Ensuring that debt is used primarily for truly essential projects, rather than as a routine tool to cover deferred maintenance or ambitious expansion plans, is important for long-term planning and cost discipline. Factors contributing to this debt such as declining enrollment should prompt consolidation, downsizing, or alternative facility use rather than additional borrowing.
As Minnesota evaluates its approach to school finance, rising per-student debt highlights the need for more careful fiscal planning and a broader conversation about how to sustainably fund both day-to-day education operations and the capital needs of schools.
Long-term debt climbing nearly 40 percent over the last two decades gives lawmakers, school leaders, and communities much to analyze and consider about balancing investment in facilities with the overall financial health of districts. It shouldn’t, though, be an excuse to default to the argument that more funding is simply the answer, as total aid per student adjusted for inflation has notably increased over the years.
Rising debt should be seen less as an unavoidable necessity and more as evidence that Minnesota’s education system relies too heavily on borrowing instead of structural reforms, efficiency, and stricter spending limits.
