Funding grows for higher education institutions, financial aid programs

The higher education policy and finance law increases General Fund appropriations by $650 million for the Minnesota State system of colleges and universities, the University of Minnesota, the Office of Higher Education and the Mayo Foundation’s medical education programs.

Sponsored by Rep. Gene Pelowski, Jr. (DFL-Winona) and Sen. Omar Fateh (DFL-Mpls), the law contains $1.87 billion in the 2024-25 biennium for Minnesota State and $1.51 billion for the University of Minnesota. That’s a $292.9 million increase for Minnesota State and $125.2 million for the U of M. Funding for the Office of Higher Education will increase $231 million, while the Mayo Clinic will see an $896,000 increase for its medical education programs.

The law also establishes an Inclusive Higher Education Technical Assistance Center, creates a direct admissions program, provides aid to postsecondary institutions for unemployment insurance, and establishes a student basic needs working group.

It takes effect July 1, 2023, unless otherwise noted.

HF2073*/SF2075/CH41

Appropriations (Article 1)

Office of Higher Education: The administrator of the state’s financial aid programs will receive a total appropriation for the 2024-25 biennium of $776.4 million, an increase of $231 million.

The largest portion of the increased funding is $117.9 million for the “North Star Promise” program, which will provide free tuition to the state’s public colleges and universities for qualifying students from families making $80,000 or less annually.

The state grant program will receive a $38.8 million increase, including more for students’ living and miscellaneous expenses and simplification and federal conformity for the program. And a scholarship program that will provide free tuition for qualifying Indigenous students at the state’s public postsecondary institutions will receive $17 million.

The Office of Higher Education will also receive increases of:

• $8.7 million for dual training competency grants;

• $6.6 million in emergency assistance for postsecondary students;

• $6 million for tribal college grants;

• $6 million for a student parent support initiative;

• $4.2 million to maintain current service levels in agency administration;

• $3.2 million for paramedic scholarships;

• $3 million for a Next Generation nursing assistant training program;

• $2.3 million for hunger-free campus grants;

• $2 million for inclusive higher education programming;

• $2 million for the Minnesota Independence College and Community;

• $1.6 million for grants to student teachers in shortage areas;

• $1.6 million for grants to underrepresented student teachers;

• $1.6 million for teacher shortage loan repayment;

• $1.5 million for the Statewide Longitudinal Education Data System;

• $1.35 million for Minitex and MnLINK, a library network that facilitates resource sharing;

• $1.1 million for Fostering Independence higher education grants;

• $1.1 million for a direct admissions program;

• $1 million for foster care grants;

• $800,000 for the intervention for college attendance program;

• $540,000 for an addiction medicine graduate medical fellowship;

• $316,000 in unemployment insurance aid for tribal colleges;

• $277,000 for a director of tribal relations, public engagement, and equal opportunity;

• $250,000 to complete a report on Minnesota State course placement practices;

• $75,000 for a higher education public service feasibility study;

• $60,000 for the loan repayment assistance program; and

• $44,000 for a postsecondary student basic needs working group.

The law also establishes annual base funding of:

• $14.5 million for work-study grants;

• $8.5 million in interstate tuition reciprocity;

• $6.7 million for child care grants;

• $3.5 million for American Indian scholarships;

• $3 million for a spinal cord injury and traumatic brain injury research grant program;

• $645,000 to Hennepin Healthcare for graduate family medical education programs;

• $550,000 for the College Possible program for low-income students;

• $501,000 for the United Family Medicine residency program;

• $375,000 for a large animal veterinarian loan forgiveness program;

• $340,000 for concurrent enrollment grants;

• $250,000 for summer academic enrichment grants;

• $250,000 for campus sexual assault reporting;

• $200,000 for grants for students with intellectual and developmental disabilities;

• $200,000 for student loan debt counseling;

• $180,000 for the “Get Ready!” college and career readiness program;

• $150,000 for a campus sexual violence prevention and response coordinator;

• $122,000 for student-parent information;

• $115,000 for member-state fees for the Midwest Higher Education Compact;

• $100,000 for safety officers’ survivor grants;

• $50,000 for an agricultural educators loan forgiveness program;

• $45,000 for the Minnesota Education Equity Partnership; and

• $25,000 for an aviation degree loan forgiveness program.

Minnesota State: The system will receive $1.87 billion during the 2024-25 biennium, an increase of $331.4 million that includes $289.9 million for operations and maintenance. Among the Minnesota State system’s appropriations, changes include an additional:

• $75 million for a tuition freeze for undergraduate degree-granting programs;

• $50 million in onetime campus support;

• $13.5 million for upgrades in equipment and learning environments;

• $13.5 million to develop and expand industry sector programming and work-based learning experiences;

• $6.3 million for high-need student support services;

• $3 million for systemwide technology;

• $3 million for the system’s central office and shared services unit;

• $2 million for open educational resources, including the Z-Degree textbook program;

• $1.7 million to increase employer contribution rates for retirement accounts;

• $1.6 million for unemployment insurance aid;

• $764,000 for free menstrual products; and

• $475,000 to help child development associates earn academic credit towards a related certificate, diploma or degree.

The law also dedicates an annual base-level amount of:

• $5.7 million in supplemental aid to state colleges with campuses outside of a metropolitan county;

• $4.5 million for workforce development scholarships;

• $4.1 million for the Learning Network of Minnesota, a statewide telecommunications and technology network;

• $300,000 to provide educational programming, workforce development, and academic support to remote regions in northeast Minnesota; and

• $40,000 for implementing sexual assault policies.

The law also establishes a base amount of $833.2 million for each fiscal year in the 2026-27 biennium for operations and maintenance.

University of Minnesota: The university’s five-campus system receive $1.51 billion in the fiscal 2024-25 biennium, a $125.2 million increase over the prior biennium. Included are increases of:

• $10 million for systemwide safety and security;

• $10 million for University of Minnesota Medical School programs and scholarships on the CentraCare Health System Campus in St. Cloud;

• $4 million for the Natural Resources Research Institute;

• $732,000 for unemployment insurance aid; and

• $484,000 for free menstrual products.

The law also establishes an annual base-level amount of:

• $42.9 million for the agricultural and extension service;

• $15 million to the medical school for research, attraction and retention of staff and students, and investing in physician training programs in rural and underserved areas;

• $9.2 million for health sciences, including supporting resident physicians at the St. Cloud Hospital family practice residency program;

• $8 million to the University of Minnesota and Mayo Foundation Partnership, $7.5 million of it for a collaborative research partnership on biotechnology and medical genomics;

• $7.8 million for health training restoration, supporting faculty physicians, the mobile dental clinic, and expansion of geriatric and family programs;

• $4 million to MnDrive to advance cancer care research;

• $2.2 million from the health care access fund for training primary care physicians;

• $1.1 million to the College of Science and Engineering for the geological survey and the talented youth mathematics program; and

• $500,000 to the Morris branch to cover the costs of tuition waivers for Native American students.

The law also specifies an operations and maintenance base of $672.3 million for fiscal year 2026 and later. And the Academic Health Center is estimated to receive funding of $22.2 million each year from the dedication of a portion of cigarette taxes.

Mayo Clinic: The Mayo Foundation’s $3.6 million appropriation is $896,000 higher than the previous biennium. The additional funds will support the Mankato residency program recently acquired from the University of Minnesota and increase funding for its Rochester program.

The law also requires the financial review of nonprofit grant recipients.

Higher Education provisions (Article 2)

The law establishes several new programs, most prominently the North Star Promise financial aid program, making attendance at public postsecondary institutions free for students whose families make under $80,000 per year. The scholarships are designed to cover the tuition and fees charged by an institution after deducting other grants and scholarships received. For the first three years of the program, surplus funds may be used to match students’ Pell grants up to 50%.

The law places a pilot program into statute: providing qualifying Minnesota high school seniors automatic conditional admission to public colleges and universities. Also established is a new program providing grants to postsecondary institutions and other applicants to support expectant parents and parents of young children.

Clarifications are made concerning dual training competency grants, including the per-employee maximum grant amount, that a large employer must pay at least 25% of the cost of employee training, and that employers may use up to 10% of the grant to pay for employees’ training supports. And transportation and child care are added to the list of occupations eligible for grants.

The law also:

• creates a new program to provide tuition- and fee-free undergraduate education to American Indian students at public postsecondary institutions;

• establishes a paramedic scholarship program within the Office of Higher Education;

• requires Minnesota State and requests that the University of Minnesota provide students access to free menstrual products;

• expands the competitive grant process for a hunger-free campus designation to nonprofit private postsecondary institutions and assigns responsibility for the program’s oversight to the Student Advisory Council;

• creates an Inclusive Higher Education Technical Assistance Center to increase higher education access for students with intellectual disabilities, and creates a competitive grant program for postsecondary institutions to create or expand such programs;

• amends the definition of “assigned family responsibility” for the state grant program and the definition of “student” for state financial aid programs;

• increases the state grant program’s living and miscellaneous expense allowance from 109% to 115% of the federal poverty guidelines for a one-person household in Minnesota for nine months;

• amends the cap on state grant awards from eight full-time semesters to 180 total credits, and extends the deadline for state grant applications;

• makes technical adjustments to conform to changes in federal student aid calculations for Fostering Independence grants, child care grants, and Indian scholarships;

• prioritizes applicants for teacher shortage loan repayment eligibility based on race or ethnicity;

• adds construction, education and public safety to program areas eligible for workforce development scholarships;

• provides state aid to support unemployment insurance payments for the University of Minnesota, Minnesota State and tribal colleges, and requires reports to the Legislature;

• increases the employer contribution rate for the individual retirement account plan to 8.75%; and

• requires the Office of Higher Education to analyze Minnesota State course placement policies and practices to determine whether they have adverse consequences for students or disparate impacts on certain groups, and to convene a working group to make recommendations on how to support postsecondary students experiencing homelessness or food insecurity.

HF2073* / SF2075 / CH41