Higher education law appropriates $4 billion, addresses grant program deficit

The higher education budget and policy law appropriates $4.01 billion for the 2026-27 biennium to the Office of Higher Education, Minnesota State and University of Minnesota.

Sponsored by Rep. Dan Wolgamott (DFL-St. Cloud) and Sen. Omar Fateh (DFL-Mpls), the law contains $1.76 billion in the 2026-27 biennium for Minnesota State, $1.49 billion for the University of Minnesota, and $760 million for the Office of Higher Education. The Mayo Foundation’s $3.6 million appropriation is eliminated.

The law takes effect July 1, 2025, unless otherwise noted.

2025 Special Session: SSHF6/SSSF1*/CH5

Appropriation changes

The Office of Higher Education that administers the state’s financial aid programs will receive $760.98 million. Of that, $494.6 million is targeted to the State Grant Program, a $44.47 million increase to remedy a program deficit.

In addition to the funding increase, the law uses policy changes to attack the deficit including:

lowering the maximum lifetime credit cap on state grant awards from 180 credits to 120 credits;

imposing a tuition cap for four-year programs;

reducing the default living-and-miscellaneous-expense allowance from 115% of federal poverty guidelines to 106% for a one-person household for nine months; and

changing the deadline for applications for state grant awards for an academic term from the end of the fiscal year following the term to 30 days after the start of that term.

For the State Grant Program, the definition of assigned family responsibility is amended. Per the law, the assigned family responsibility for dependent students is 95% (was 79%) of the parental contribution. If the parental contribution is between $0 and negative $1,500, the assigned family responsibility is 50% (was 100%) of the parental contribution. If the parental contribution is less than negative $1,500, the recognized parental contribution is negative $1,500. For independent students, the responsibility is set at 50% of the negative student contribution, subject to a minus-$1,500 floor, if the federally determined student contribution is less than zero.

The office will also receive increases of $8 million for fostering independence higher education grants; $1.25 million for agency administration, and $500,000 more for child care grants.

However, the law will reduce by $6.06 million emergency assistance for postsecondary students, funds that will instead go directly to Minnesota State and the University of Minnesota to be used for similar purposes; $5.5 million to the state work-study program; $1.6 million for hunger-free campus grants (also shifted directly to the systems); and $500,000 in grants to student teachers in shortage areas.

Minnesota State will receive $1.76 billion, a $6.2 million increase: $4.5 million for emergency assistance for postsecondary students grants; $1.2 million for hunger-free campus grants; and $500,000 for Lake Superior College PFAs remediation.

The five-campus University of Minnesota will receive $1.49 billion, including $15.26 million in fiscal year 2026 for a partnership with the Mayo Clinic for Amyotrophic lateral sclerosis (ALS) research; $3 million for residency programs in St. Cloud and Willmar as part of a partnership between the medical school and CentraCare; $1.56 million for emergency assistance for postsecondary students grants; and $400,000 for hunger-free campus activities.

No longer funded is $14.98 million for the university and Mayo Foundation partnership for biotechnology and medical genomics and Alzheimer’s research grants.

Other decreases include $2 million for the cannabis research center, $1.4 million for Research and Innovation Office; $1 million for Alzheimer’s research grants; $588,000 for University of Minnesota Talented Youth Mathematics Program; $184,000 for Humphrey Forum; and $58,000 for economic development research.

Policy provisions

Policy in the law includes changes to existing programs and regulatory laws.

For example, the law requires Minnesota State and requests the University of Minnesota to maintain a supply of nasal opiate antagonist at each campus residential building. A nurse or other institution personnel can be authorized by a physician to administer opiate antagonists.

When it comes to campus sexual misconduct, the law amends postsecondary institution requirements regarding procedures for adjudicating campus sexual misconduct allegations, including letting institutions use the “preponderance of evidence” standard of proof or any higher standard, including “clear and convincing evidence,” and require institutions to hold a hearing related to disciplinary action if requested by either the reporting or responding party in adjudicating campus sexual misconduct allegations.

The law also:

allows Minnesota State universities to offer applied doctoral degrees in cybersecurity;

requires Minnesota State and requests University of Minnesota that all North Star Promise eligible students — Minnesota residents with a family Adjusted Gross Income below $80,000 — receive resident tuition rates;

sets the deadline for scholarship applications for the North Star Promise program to 30 days after the start of the term for which the scholarship is applied, to align with the State Grant Program deadline;

establishes that a student who has completed the degree requirements for their first baccalaureate degree is no longer eligible for North Star Promise, even if the student has not yet graduated with the degree;

removes “the number of late payments in the previous 12 months” from the list of data elements the Office of Higher Education may disclose to a consumer credit reporting agency with borrower consent;

expands tribal college supplemental grant assistance to tribal colleges based on beneficiary and nonbeneficiary students;

allows only postsecondary institutions and nonprofit organizations to receive a spinal cord and traumatic brain injury research grants;

expands the existing free unlimited access to the Landscape Arboretum for disabled veterans to also include one guest of the veteran;

establishes a working group to develop policy recommendations to prevent fraudulent enrollment in online courses; and

establishes within Minnesota State, a temporary pilot program to provide last-dollar, full tuition and fee grants for Minnesota law enforcement officers and their dependents attending state colleges and universities. This program will expire June 30, 2027.

SF1075* / HF1243 / CH5