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Higher Education Bill Includes New Money, Priorities for Colleges and Universities




Contact: Sandy Connolly, Director of Communications, Office of Higher Education 651 259-3902

Minnesota's public colleges and universities and many college students seeking financial aid can expect state funding increases as a result of the first major funding bill passed by the Legislature and signed by Governor Tim Pawlenty May 26.

The 2006-2007 Omnibus Higher Education Appropriations Act contains $2.8 billion in funding for the University of Minnesota, the Minnesota State Colleges and Universities, student assistance programs and other initiatives. The bill provides funding to plan for a new university presence in Rochester, the creation of centers of excellence at Minnesota State Colleges and Universities and major research initiatives at the University of Minnesota, all of which were identified as priorities by the Governor prior to the session.

The needs of Minnesota are changing and this bill begins to help the higher education sector respond strategically, said Susan Heegaard, director of the Office of Higher Education. Many people came together to make this an innovative compromise bill at a time when new funding is scarce.

Bill highlights:

University of Minnesota

  • The University of Minnesota will receive a 9.9 percent increase, or $106 million in new funding, over the 2004-2005 biennium. The University of Minnesota, Twin Cities, and campuses in Crookston, Duluth and Morris will receive state appropriations of $1.251 billion from all state sources for the two-year period beginning July 1, 2005. A series of research initiatives, competitive compensation for faculty and efforts to serve underrepresented students are among the university's top priorities.

  • The process for selecting members of the University of Minnesota's Board of Regents was modified. The Regent Candidate Advisory Council will recommend candidates to the Governor. The Governor will nominate one candidate for each vacancy. A twenty-member joint legislative committee, with an equal number of members from the majority and minority party, will consider the nominations and make recommendations to the Legislature. The Legislature will elect the regents. The bill requires that consideration be given to geography, diversity, and experience when selecting regents.

Minnesota State Colleges and Universities

  • The Minnesota State Colleges and Universities system will receive an 8.5 percent funding increase, or $108 million more over the 2004-2005 biennium. The system, which includes seven state universities and 25 community and technical colleges, will receive $1.203 billion in state appropriations for the two-year period beginning July 1, 2005. The system's funding priorities include nursing and teacher education, expanding online educational offerings, outreach to underserved populations and farm and small business management education.

  • The bill includes increased funding to pay competitive compensation to faculty and staff at Minnesota State Colleges and Universities.

  • Centers of excellence will be developed at Minnesota State Colleges and Universities. The system's appropriation includes $10 million in new funding to enable the system's Board of Trustees to select up to eight programs, each tied to a university campus program, that will be expanded and enhanced to attract students, faculty and employer involvement from around the country.

  • The Minnesota State Colleges and Universities received approval to begin offering specific applied doctoral degrees in business education, psychology, physical therapy, audiology and nursing.

Financial Aid Changes/Office of Higher Education

  • Many college students will appreciate changes to the state's financial aid grant program.

  • Most of the 78,000 students projected to receive state grants next year will see an increase in their awards, beyond tuition increase adjustments. The increase is due to an upward adjustment in the recognized cost of Living and Miscellaneous Expenses, a figure used in calculating student eligibility for state grants.

  • The deadline for students applying for state grants was extended from 14 days to 30 days after the start of each term.

  • Students enrolled in four-year private college programs could see an additional increase in their state grants. The tuition cap applied when calculating financial aid eligibility for students in four-year programs will increase 5 percent over two years to $9,438. Students at public four-year institutions will not be affected.

  • Students attending two-year programs at some private schools could see their state grant awards decrease. The tuition cap applied when calculating financial aid eligibility for students in two-year programs will decrease 6.9 percent over two years to $6,436. Students at public two-year institutions, where all tuition rates are below the cap, will not be affected by the reduction.

  • Students who must leave college because they are called up for active military service will be granted an additional semester of financial aid eligibility and are given refunds for courses they could not complete as a result of their deployment. Students who withdraw from college due to a military service-related medical condition now have the option to receive a refund or complete their coursework at a later date.

  • The maximum annual award for Postsecondary Child Care Grants was increased from $2,200 to $2,300.

Office of Higher Education

  • The Office of Higher Education will change its name to the Minnesota Office of Higher Education, effective July 1, 2005. The change reflects its new role as a state agency responsible for financial aid, higher education policy, data collection, analysis and reporting. The Higher Education Services Council, which previously served as the governing board for the Office of Higher Education, was eliminated from statute.

  • The agency will develop a statewide higher education accountability system to provide information to students, taxpayers and policymakers on the effectiveness of the higher education sector in meeting state goals.

  • The agency will complete a study of the for-profit postsecondary education schools. The agency will also review and report to the legislature on licensure policies for all private postsecondary institutions.

  • The Legislature granted the Office of Higher Education permission to reinvest projected surplus dollars back into the State Grant program in the second year of the biennium. If a surplus is projected, the agency will incrementally increase the Living and Miscellaneous Expense figure used in the calculation of state grants, thus increasing state grant awards for all eligible students.

  • The Office of Higher Education will serve as the fiscal agent for funding appropriated to plan a new higher education presence in Rochester. An 11-member planning committee will be appointed by the Governor and charged with bringing a blueprint to the Legislature. New programs will be developed to meet the growing need for bachelor's degrees and graduate-level programs in that rapidly growing community. Funding for this initiative is $3.2 million.

  • Funding for Intervention for College Attendance Program grants was increased to reach more students with early intervention programs and to support administration of the program.

  • Fees were increased for private for-profit institutions seeking licensure.

  • The Office of Higher Education will conduct a study of higher education funding that will include review of current state policy that bases funding adjustments on enrollment. The agency will explore funding methods used in other states and programs and make recommendations to the Governor and the Legislature in 2006.

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