Minn. Office of Higher Education details grants, enrollment gains and strains on state grant and North Star Promise

Commissioner Dennis Olsen of the Minnesota Office of Higher Education told the House Higher Education Finance and Policy Committee that the agency’s portfolio of competitive grants and state financial-aid programs is expanding while demand pushes strain onto the state grant and new North Star Promise programs.

The Office of Higher Education (OHE) presented results and program details across a wide set of initiatives: a student-parent support competitive grant ($5.3 million awarded to 13 organizations), the spinal cord and traumatic brain injury research grants (19 projects awarded in the most recent round, totaling about $30,000,000), dual training grants (about $5.4 million awarded to 84 Minnesota employers for related instruction), and a new Inclusive Higher Education grant (Lake Superior College awarded $200,000). Megan Fitzgibbon, manager of grants and workforce initiatives, described program goals and recent award totals.

Megan Flores, manager of state financial aid programs, told the committee that Minnesota’s FAFSA completion drop was smaller than the national average after the federal FAFSA changes. "In Minnesota we didn't fare quite as poorly as others. We were only down about 4.8%," Flores said, and she reported statewide undergraduate enrollment growth of about 7.4% year over year. Flores said the office and campus and nonprofit partners ran workshops and outreach to limit national declines.

Why it matters: committee members and OHE staff said enrollment gains are positive but create budget pressure for state aid. Flores reported initial North Star Promise disbursements for the program’s first year: "we're seeing just under 15,000 students" receiving the base tuition-and-fee benefit, and roughly 40,000 students receiving the North Star Promise Plus benefit; about 5,700 students received both awards. Flores gave average award figures of roughly $1,800 for the base Promise award and about $376 for the Plus award. OHE said rising enrollment, combined with existing state grant demand, has created a need for a deeper budget and policy review of the Minnesota State Grant and North Star Promise interplay.

Other program details provided to the committee: the student loan debt counseling grant was awarded to Lutheran Social Services (about $388,000 across the past biennium) and, according to Fitzgibbon, that grantee provides phone and online counseling to roughly 10,000 families annually. The Emergency Assistance for Postsecondary Students (EAPS) program produced thousands of emergency grants: OHE reported over 3,300 emergency grants at Minnesota State totaling more than $2.3 million, 850 emergency grants at the University of Minnesota totaling over $750,000, and roughly $900,000 awarded to 10 private and tribal colleges in a recent cycle. Concurrent enrollment and hunger-free campus grants were also described, with recent competitions funding multiple colleges and partnerships.

Flores summarized how state and federal aid interact. She explained federal law governs order when federal last-dollar programs apply; for state last-dollar programs OHE and the Legislature have relied on an "order of enactment" approach and agency guidance so campus financial-aid offices can calculate and disburse aid.

Committee response and next steps: members asked for a state-grant deep dive. Chair and agency staff agreed to schedule a follow-up hearing focused on the Minnesota State Grant budget and how it interacts with North Star Promise. Commissioner Olsen said the office would return for a detailed briefing on options and tradeoffs.

Ending: OHE completed an overview of dozens of grants and programs and flagged enrollment-driven budget pressures that lawmakers said they will examine in a dedicated follow-up hearing.