The Minnesota Legislature ended its work in late May having passed a higher education bill that will put $36 million of new funding into the State Grant program, which helps one out of four Minnesota college students. And on May 30 Gov. Mark Dayton signed the bill into law.
“Policymakers understand the importance of holding open the doors of opportunity for low- and middle-income families to have their children be able to afford to go to college,” said Paul Cerkvenik, president, Minnesota Private College Council. “We certainly saw them act on that belief this session. New funding for the State Grant program will mean larger awards and more eligible students.”
Policymakers have increased the State Grant program’s base funding by 10 percent. That’s a meaningful jump, given all the competing demands on limited state funds. Need-based State Grant awards help students at public and private institutions, whether they are earning associate or bachelor’s degrees.
The new funding targets a part of the formula that is used to calculate awards, reducing the share of expenses that families and students are expected to cover. For students at Minnesota’s private nonprofit colleges, the new investment will mean that the average award will increase by $180 next fall.
In other higher education news, changes made in the new tax law aim to encourage families to save money for college through 529 plans. Contributions made to these college saving plans of up to $3,000 are now tax deductible — in effect lowering a family’s taxable income. Another change tied to 529 plans offers families with incomes below $160,000 who save money for college through a 529 plan with a tax credit, which reduces a family’s tax liability by up to $500. College graduates with qualified education loans will also be helped by the tax law, with new tax credits created that target borrowers with a high debt-to-income ratio.