Minnesota State approves plan to shift funding to struggling universities
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The Minnesota State colleges and universities system’s board of trustees on Wednesday approved a plan to redirect millions of dollars to help struggling universities.
The plan will reallocate up to $25 million each year for the next four years to financially challenged institutions. The majority of that amount — about $15 million a year — will go to St. Cloud State University and Bemidji State University.
Those two schools have faced enrollment declines and budget deficits. Minnesota State officials say they have already undergone budget cuts, including cuts to academic programs and their workforce, but their cash finances have weakened to an unacceptable level.
The officials said the funding shift is needed as a temporary solution while they work on a plan to realign the entire system of colleges and universities. The system has a structural deficit of about $30 million, which is projected to grow to $100 million in two years if no action is taken.
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Chancellor Scott Olson said recently the system needs to "right size" itself, and that could mean closing some institutions or campuses.
Minnesota State leaders recently announced they plan to close the community and technical college campus in Detroit Lakes as soon as the summer of 2028.
The funding reallocation proposal was developed with input from Minnesota State leaders and has received a lot of feedback. Some officials at two-year colleges voiced concern about their financial burden.
At Wednesday’s board meeting, trustee Roger Moe said it’s not uncommon in Minnesota State’s history for some institutions to depend on funding from others.
"Sometime over the past 25 years ... practically every campus has had to rely on the collective strength of the system,” Moe said.
The financial challenges aren’t unique to Minnesota State higher education institutions. Colleges and universities across the U.S. are facing declining enrollment due in part to a shrinking number of college-age students, a problem known as the demographic cliff.
Minnesota’s state colleges and universities have faced rising costs and flat state funding that hasn’t kept up. They’ve also faced a decline in international students due to federal immigration policies.
The system plans to ask the Legislature for increased funding next year for the realignment plan, and to help some schools demolish old buildings to save on maintenance costs.
