Governor Mark Dayton and the Legislature made important improvements in the State Grant program in 2013 — and Minnesota students and families are thankful for the much-needed increases in financial aid. With a small projected balance in the State Grant program budget, the 2014 legislative session is the time to complete what was started and make college more affordable for low- and middle-income students — at no new cost to the state budget.
- We urge policymakers to raise the program’s tuition cap, completing last year's proposal. The cap currently falls $620 below the full cost of tuition and fees at the U of M. Raising this cap to full U of M tuition and fees would allow for a modest increase in grants of $310 for most recipients at private nonprofit colleges and the U or M. Raising the cap will achieve the important policy goal of ensuring that the financial aid grants are determined based on the actual tuition and fees at all public institutions.
- We also urge policymakers to improve how State Grant awards address living expenses. By adjusting how living expenses are taken into account, the Office of Higher Education has made a one-year change that will increase most grants by $200 for the 2014-15 school year. Legislators should make this change permanent, helping all State Grant recipients at all institutions.
By taking these two steps, our state can complete what was started in 2013 and help make college more affordable for low- and middle-income college students.
Who benefits from the State Grant program?
- More than one in four of Minnesota’s college students receive these grants. The program:
- Benefits almost 100,000 students a year
- Targets low- and middle-income families
- Helps students enrolled part- and full-time at the U of M, MnSCU colleges (both two- and four-year) and private colleges
Why is there a project program balance?
- Declining enrollments (after years of increases), an increase in the federal Pell Grant and improving family incomes are three factors that are contributing to the expected balance in the State Grant program.
Where should the program balance go?
- For decades there has been a bipartisan legislative commitment to reinvest any State Grant program balances by returning them to students in the form of financial aid.
- Reinvesting the projected program balance would be budget neutral. No new appropriations are needed this year to increase grants.
Why should the Legislature act?
- The impact of State Grant awards has fallen over time. Even after last year’s improvements, the maximum State Grant and Pell award, as a percentage of tuition and fees, will remain considerably lower than it was 15 years ago. That’s true for students at MnSCU, the U of M and private nonprofits.
- By taking these steps legislators can vote to make college more affordable.
Why increase the tuition cap?
- This change would achieve an important policy goal of having grants reflect full tuition and fees at public institutions.
- Last session Gov. Dayton and the Legislature prioritized raising the tuition cap; the governor’s budget would have set the cap at the same level as the highest priced two-year and four-year public institutions ($5,693 and $13,620, respectively).
- Policymakers ended up increasing the cap from $10,488 to $13,000, falling short of the actual tuition and fees at the U of M by $620. Now, with a remaining projected balance in the program, policymakers can continue to fill this gap.
- There’s also a fairness concern. Having the four-year cap set below tuition and fees at the U of M means that students at the U of M and at private colleges are not treated the same as MnSCU students, who have 100% of their tuition and fees recognized.
- For low- and middle-income students at private nonprofit colleges and the U of M, raising the cap would allow for a modest increase in grants of $310 for most recipients.
Why increase the expense allowance?
- Last session Gov. Dayton also prioritized raising the allowance for student living expenses, from $7,000 to $8,300 to better recognize students’ actual costs. The final higher education bill ended up increasing the allowance from $7,000 to $7,900.
- In February, the Minnesota Office of Higher Education acted to temporarily raise the allowance for the 2014-15 school year only. This change increases awards for most grant recipients at all institutions by $200.
- Legislative action is required to make this change permanent.