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Home > News > News Releases > Minnesota: Focused on Affordability and Accelerating Completion

 

Minnesota: Focused on Affordability and Accelerating Completion

2/18/2014


 

This piece originally appeared in the Lumina Foundation's Strategy Labs as part of its Champion series.

By Commissioner Larry Pogemiller, Minnesota Office of Higher Education

The state of Minnesota has always been a leader with regard to postsecondary education. We currently rank second in the nation in postsecondary attainment and 73 percent of students earning certificates or degrees in 2010-2011 were employed one year after graduation. These accomplishments are the result of a historically strong commitment to investing in education, both in our students and our public institutions.

Minnesota is not immune to significant challenges, however. Over the past decade, tuition and fees have increased by three times the rate of inflation and state grants have not kept up with demand. Rising costs have placed an unfair burden on low- and middle-income students and families, increasing their reliance on costly borrowing and limiting student choice.

Minnesota now has the fourth highest student debt rate in the country, with an average student debt load of nearly $31,500. We also rank fifth highest in the number of students who take out loans, with 70 percent of students borrowing to finance their post-secondary education.

The faces behind these statistics tell the real story. Over the past two years, college students from every region of the state, across all sectors of postsecondary education told me about the challenges they face with regard to paying for college, the choices they have made, and specifically, what they thought state leaders could do to help them meet those challenges.

Each student had a story to tell. Some were forced to delay starting school, while others have given up on pursuing the careers of their choice. Many receive a grant or scholarship, but will still graduate thousands of dollars in debt. Nearly all of them work, and yet when asked if they also had student loans, the majority raised their hands. One student told me directly, "The best thing Governor Dayton can do for students is help reduce debt."

Two things became clear from these conversations: students today recognize that a postsecondary education is more important than ever and, with few exceptions, paying for that education is hard for everyone. And, despite remaining very optimistic about college being worth it, they all worry about the long-term consequences of debt.

Governor Dayton listened and made higher education a priority in the 2013 state budget. Under his leadership, direct aid to students saw the largest increase in over 25 years. More middle class students became eligible for state aid and current recipients received more money. Over 100,000 Minnesota students received financial assistance as a result of this new law.

The increase in student aid was made possible by the Minnesota State Grant, a need-based grant that helps over one-third of resident undergraduates pay for college. Established in Minnesota Law in 1969, the State Grant promotes both access and choice, allowing the student and family to decide what school best meets their needs and aspirations. Based on a design for shared responsibility, the price of attendance, which includes tuition, fees and living expenses, is divided among three payers: students, families and taxpayers.

The student responsibility is based on the "Benefits Received" principle, and asks students to pay at least 50 percent of the cost of attending the institution of their choice. The benefits they receive from this investment include increased wages, employment opportunities, employment tenure and status, as well as non-employment related benefits.

The family contribution is based on an "Ability to Pay" principle, and asks families to contribute based on their available income and assets. Finally, the third payer is the taxpayer, with contributions made through both the Federal Pell Grant and the Minnesota State Grant. Increases in Pell Grant funds to Minnesota students allow the state flexibility in targeting State Grant dollars to specified populations, to increase eligibility or to offset rising student costs.

In the early years of the Minnesota State Grant, full-time enrollment was defined as 12+ semester credits, or the equivalent; in 1993, Minnesota changed the full-time definition to 15+ credits. While millions of dollars in State Grants are provided each year to students who take fewer than 15 credits, the change in definition means that in order to receive the maximum award amount, a student needs to be enrolled for at least 15 credits. This decision was made in recognition of the number of credits needed to graduate on time with a bachelor's degree in four years, or an associate's degree in two years.

The full-time definition determines lifetime eligibility for a State Grant based on four years (eight semesters) of enrollment. At 12 credits a semester, a student will only reach 96 credits, short of the 120 credits needed to graduate. In other words, students were running out of eligibility for State Grants before completing their bachelor's degree.

Data also shows that students who attend postsecondary on a part-time basis are less likely to complete their education, while full-time (15 credits) attendance is a good predictor of completion. At the time of this change, college completion rates for Minnesota were lagging those of other states; since the change was enacted in 1993, the percent of students enrolled in 15+ credits in all terms increased. Overall, the historic higher education funding package enacted last year made significant strides toward holding the line on the cost of college, expanding access and reducing debt for Minnesota students.

With an approaching labor shortage, we cannot afford to have even one Minnesota student or family believe higher education is out of reach. This year, our state halted the trend of disinvestment and took the first steps toward changing the legacy for this generation of students from staggering debt and limited opportunities, to a postsecondary education that is more affordable and attainable. That is an investment in Minnesota's future worth making, one with the potential for a significant economic and social return.