Higher education agreement features big funding bumps, free tuition for some students

— UPDATED at 3:19 p.m. following floor vote

What’s the key to reversing enrollment declines at almost every public college and university in Minnesota? Is cost keeping students away?

If it is, then the higher education conference committee report has what it hopes will be a step toward a solution: Free tuition and fees at any public postsecondary institution for students from families earning less than $80,000 a year. If their families make that amount or more, at least they could look forward to a two-year tuition freeze at schools in the Minnesota State system.

Those are two of the most high-profile items in the conference committee report, which passed the House Tuesday by a 69-62 party-line vote and awaits action by the Senate.

The $4.16 billion bill reflects an increase of $650 million for higher education, with House and Senate negotiators going roughly down the middle in any appropriation differences the two chambers had for the Minnesota State and University of Minnesota systems and the Office of Higher Education, which oversees the state’s financial aid programs.

Sponsored by Rep. Gene Pelowski, Jr. (DFL-Winona) and Sen. Omar Fateh (DFL-Mpls), the agreement to HF2073 contains $1.87 billion in the next biennium for Minnesota State and $1.51 billion for the University of Minnesota. That’s an increase in funding of $292.9 million for Minnesota State and $125.2 million for the university.

“It says in state law that we should fund two-thirds of a student’s education, and the student one-third,” Pelowski said. “We’ve drifted so far away from that that individuals can no longer afford an education in this state. This bill puts us back on the course to actually obeying the laws that we pass in this state.

“This bill also addresses a historic worker shortage. We need skilled workers. To get them, we are going to have to have individuals of all ages go back to school to get an employable skill set.”

Similarly, the Office of Higher Education’s appropriation came in about halfway between the House and Senate proposals. Hence, the “North Star Promise” program that would provide those scholarships isn’t quite as generous as in the Senate bill, now coming in at $117.9 million in fiscal 2024-25.

That would make up the largest portion of the $231 million in increases for the Office of Higher Education. Also getting a boost would be the state grant program’s outlay for students’ living and miscellaneous expenses ($21.1 million) and budget for simplification and federal conformity ($17.7 million). An American Indian scholarship program would receive $17 million, while dual training competency grants would see an additional $8.7 million.

The Office of Higher Education would also receive increases of:

• $6.5 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 the Inclusive Higher Education program; and
• $2 million for the Minnesota Independence College and Community.

While the House had hoped to provide $5.4 million in allied health technician scholarships, that didn’t make it into the final bill.

[MORE: View the spreadsheet]

Minnesota State

Among appropriations for the Minnesota State system, the biggest changes would be an additional:

• $122 million for system stabilization;
• $75 million for a tuition freeze;
• $50 million in campus one-time support;
• $13.5 million for equipment and learning environments;
• $13.5 million to develop and expand industry sector programming;
• $6.3 million for student support;
• $3 million for systemwide technology; and
• $2 million for open educational resources or the Z-Degree textbook program.

The House was hoping to also increase funding for workforce development scholarships by $12.5 million, but it was not to be.

University of Minnesota

The most significant increases in funding for the University of Minnesota would be:

• $100 million for core mission support;
• $10 million for systemwide safety and security;
• $10 million for the health sciences collaboration with CentraCare; and
• $4 million for the Natural Resources Research Institute.

The House bill also contained $48 million to cover an enrollment tuition shortfall in the university system, but it does not appear in the final bill.

Filling out the higher education budget would be an $896,000 increase in funding for the Mayo Foundation’s family medicine and residency programs, a total that matches what was in both the House and Senate bills.

“We’re spending $650 million and we’ll still have tuition increases,” said Rep. Marion O'Neill (R-Maple Lake), speaking of University of Minnesota officials telling conferees earlier Tuesday that it may approve a 3.5% tuition increase on its Twin Cities and Rochester campuses and 1% on its Crookston, Duluth and Morris campuses. “I’m very encouraged that we kept in support for our three tribal colleges and dual training grants, which have been very successful. But I just can’t do the numbers with the rest of it.”