Higher enrollment causing Minnesota State Grant shortfall

Higher enrollment and flat funding are diluting Minnesota's main college financial aid grant program and leaving it with a shortfall of about $34.5 million over the next biennium, state Office of Higher Education officials reported today.

Speaking before the state House committee on higher education, the officials said the State Grant, which provides financial aid to college students from low and middle-income families, will see a shortfall of $14.7million in fiscal year 2012 and a $19.8 million shortfall in fiscal year 2013.

How they got to those numbers:

Funding for the State Grant program is projected to be flat -- just over $144 million in the next two years. But the state would have to spend almost $159 million this year and $164 million next year to meet students' needs, according to projections by the office.

State officials said they'll have to look at more rationing of the grants --  reducing the size of individual grants, the overall number of grants or both.

Policy Analyst Meredith Fergus of the state Office of Higher Ed said the state could consider having both students and their families pay a greater share of their education costs so that the State Grant funding can reach more students.

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Christopher Halling, system director for student financial aid at the Minnesota State Colleges and Universities (MnSCU) system, suggested changing the formula so that more State Grant money goes to the poorest students, leaving families with higher incomes to pay a greater share of the burden.

He also suggested not cutting the State Grant when the amount awarded by the Pell Grant increases.

And he suggested allowing working students who are not going to school full-time to be paid according to how many credit hours they're taking. At the moment, he said, a working student who takes 60 percent of a full-time class load doesn't get 60 percent of what a full-time student would get in aid -- and might get nothing at all.

"There are many single parents (who study) with responsibilities at home," he said.

Toward the end of the hearing, students and officials from the University of Minnesota, MnSCU schools, private and for-profit colleges asked House committee members to support the State Grant. Many worked while going to school, were single parents or had parents who were unemployed at some time during their education.

Minnesota School of Business - Rochester student Lynn Berger, a former stay-at-home mom with three kids, told the committee, "If I did not get the State Grant, I wouldn't be going to school. I would not want to take from my children to go to school."