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Principals say rapid PSEO growth strains high schools financially and erodes local course offerings; propose caps and shared solutions
Summary
Principals from rural and small Minnesota high schools told the House Education Policy Committee on Jan. 22, 2025, that rapid growth in PSEO enrollment — especially online courses — is shifting funding away from home high schools and undermining local advanced-course offerings.
Elementary and secondary principals from Greater Minnesota told the House Education Policy Committee on Jan. 22, 2025, that a surge in Post-Secondary Enrollment Options (PSEO) — particularly online courses — is creating financial pressure and reducing local advanced-course offerings.
Aaron Nelson, principal of Pequot Lake Schools, said PSEO enrollment across his district cluster rose from 182 students in fall 2022 to 232 in fall 2024, with projections of more than 250 for spring 2025. "This represents over 15% of our student populations," Nelson said, and he estimated the growth produced roughly $500,000 in lost funding to his high school for a single semester.
Dr. Eric Nelson, principal at Chatfield Secondary School, said PSEO now risks becoming "a bit like the wild, wild west," with lowered admission standards and an increase in students taking college courses for credits that may not align with degree pathways. He and other principals reported canceled in-district advanced courses — calculus, advanced languages and college chemistry — because enrollment fell when students selected PSEO alternatives.
Proposals offered to address inequities and sustain local options
Both principals recommended policy changes to balance student opportunity, quality and fiscal sustainability:
- Cap per-credit PSEO reimbursements or charge a flat per-credit fee to limit uncontrolled revenue losses by home schools. - Prorate or recover funding when students withdraw or fail PSEO courses so high schools are not left covering subsequent remediation costs without revenue. - Strengthen eligibility and enrollment guardrails (for example, limiting PSEO to 11th and 12th graders or requiring ACT/accuplacer thresholds) to reduce enrollments from students who are unprepared for college-level work. - Incentivize and support high school College in the Schools (CIS) consortia that allow districts to pool resources and retain college-credit courses locally; use existing concurrent-enrollment grants to seed consortium development. - Require colleges to share student-status updates at least twice during a term so high schools can intervene early and protect students’ eligibility for activities and remedial support.
Why it matters: Principals said the current PSEO growth pattern disadvantages small and rural high schools that cannot compete with flexible online options, thereby shrinking locally controlled rigorous offerings and eroding the academic pipeline.
No immediate legislative action was taken at the hearing; principals urged the committee to consider statutory changes that would preserve PSEO’s benefits while preventing unintended erosion of local high school programs.
