Legislature’s higher education budget makes some financial aid investments but misses important opportunity

Policymakers have put together their visions for Higher Education in FY 2018-19. The Legislature’s conference committee report includes $125 million in additional funding, about an even split between the House and Senate’s original proposals of $149 million and $100 million. The conference agreement though is much lower than Governor Mark Dayton’s proposed $318 million in Higher Education investments.

Dayton’s Higher Education budget included $62 million in FY 2018-19 for three improvements to financial aid through the State Grant Program. These changes would:

  • Allow the grant to “fill in” for federal financial aid. Minnesota “Dreamers,” young people who came to the country as children and do not have legal status, are ineligible to receive federal Pell Grants. However, the State Grant formula currently calculates financial aid assuming students receive this federal grant, meaning that Dreamers receive much less financial aid than they need to afford college. The proposal would increase the grant award for these students so that they receive financial aid comparable to their citizen counterparts.
  • Increase the annual living allowance by $550 to better assist students in meeting their basic needs.
  • Reduce the family contribution by $500 to make college more affordable for lower-income families.

The House and Senate agreement allocates $19 million in FY 2018-19 to the State Grant Program. The agreement lowers the amount families contribute for college. It also funds a House provision for a report to estimate post-secondary expenses and what students and their families should contribute in order for the financial aid system “to fully meet the financial aid needs of lower- and middle-income Minnesota college students,” as well as the Senate provision to increase the annual living allowance by about $500 to assist students. However, while the House and Senate increase State Grant funding, they miss the opportunity to improve financial aid for immigrant students.

The legislative agreement also includes some support for the state’s public colleges and universities. The agreement includes $78 million in operations support for Minnesota State Colleges and Universities for FY 2018-19 and directs Minnesota State to freeze tuition, and then lower tuition at colleges and freeze tuition at universities. Originally, the Senate bill included additional assistance to non-metro area Minnesota State two-year colleges. For the University of Minnesota, there is more limited operations support totaling $17 million and the University is “encouraged” to move tuition rates toward the median tuition for public Big Ten universities. The House bill included language making a percentage of state funding for Minnesota State and the University of Minnesota contingent on meeting certain goals, but this language was not included in the Legislature’s bill.

-Clark Biegler

About Clark Goldenrod

Clark Goldenrod is the Minnesota Budget Project's policy analyst.
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