Minnesota Office of Higher Education tells Senate committee financial-aid programs are strained as state chases 70% attainment goal

Commissioner Dennis Olson of the Minnesota Office of Higher Education told the Senate Higher Education Committee that Minnesota’s adult postsecondary attainment rate is about 63.3% and the state needs roughly 101,000 additional credentials to reach the 2015 goal of 70% for adults ages 25–44.

The goal and the distribution of attainment across racial and ethnic groups matter for statewide workforce and educational planning, Olson said, and the Office of Higher Education (OHE) told senators the state’s financial-aid programs are under pressure because enrollment and FAFSA completion patterns have changed.

The OHE overview covered three linked areas: the statewide attainment goal and disaggregated attainment data; the administration and recent performance of state financial-aid programs (Minnesota State Grant, North Star Promise and other grants); and agency initiatives (basic-needs work, a tribal liaison, direct admissions and data work via SLEDS). "We'd like to invite the committee for some feedback on what the next educational attainment goal 2.0 is for the state," Olson said during the presentation.

On data and attainment: OHE staff said Minnesota is near the national leaders on attainment but that gaps by race, ethnicity and subgroups remain. The agency reported the current overall attainment rate as about 63.3% and said an additional roughly 101,000 credentials would be required to reach the 70% benchmark set by the legislature in 2015. OHE described the underlying data sources as institution reports, the Statewide Longitudinal Educational Data System (SLEDS) and U.S. Census Bureau American Community Survey estimates; staff cautioned some certificate estimates are drawn from multiple sources and are therefore estimates.

On FAFSA and access: OHE officials said FAFSA disruptions the prior year made outreach and support critical; Minnesota finished the fall semester with FAFSA completion rates improved compared with much of the rest of the country. The agency also described the Minnesota Dream Act application (enacted by the legislature in 2013) as the alternate pathway for a small number of residents who cannot use the FAFSA; OHE reported fewer than 1% of state grant recipients were awarded via the Dream Act (506 awards in FY24) and about 150 students used the Dream Act to access North Star Promise funds in FY24.

On major state aid programs: Megan Flores, manager of state financial-aid programs at OHE, summarized program volumes and budgets. Key points included: - Minnesota State Grant: OHE reported 71,530 recipients in academic year 2023–24, an annual appropriation of about $225,000,000, and stated the program serves students at public and participating private Minnesota institutions. The agency reported half the recipients have family adjusted gross income below $40,000. (OHE said it will provide further institutional breakdowns at a scheduled Thursday briefing.) - North Star Promise: OHE said the program is a "last-dollar" tuition-and-fees program for Minnesota residents attending public institutions with prior-year adjusted gross income under $80,000. OHE reported a FY25 appropriation of $112,000,000 for the program’s first fiscal year and an ongoing base of about $49,500,000 beginning in FY26. OHE described North Star Promise Plus as a temporary supplemental award targeted to students with the greatest financial need; for the current year OHE reported roughly 40,000 recipients of the Plus award with an average award of about $376 and about 14,500 recipients of the base award in the most recent term (OHE said campus-level administrators calculate award amounts). OHE staff cautioned the Plus award is temporary in statute and that the program’s interaction with other grants and Pell eligibility can affect awards because North Star Promise is last-dollar.

OHE staff said programs are experiencing strain because enrollment and FAFSA filings have risen; the agency noted that overlapping eligibility (for example, students qualifying for Pell and for North Star Promise) changes how awards are applied and that any changes to federal or other aid could affect state last-dollar awards.

On other programs and grants: OHE described a suite of smaller and targeted programs, including the fostering-independence higher-education grant for students with foster-care experience (appropriation $3,750,000 per year plus a $5,000,000 transfer in 2024), the Minnesota Indian Scholarship Program (historic state program with awards up to $4,000 undergraduate/$6,000 graduate), the American Indian Scholars campus-level tuition benefit (campus administered), the student-parent support initiative ($5,300,000 awarded to 13 organizations this cycle), the Inclusive Higher Education grants for students with intellectual or developmental disabilities, dual-training grants to employers ($5,400,000 awarded to 84 employers in 2024) and emergency assistance for postsecondary students (EAPS) that campuses use to help with short-term crises such as housing or transportation.

On loan-repayment and workforce programs: OHE staff described several repayment programs aimed at filling shortage occupations. Examples the agency reported: teacher shortage loan repayment (high demand, base budget $200,000; 472 awards from about 1,300 eligible applications in FY24), the Minnesota rural veterinarian loan repayment (OHE said typically five recipients per year, $75,000 in loan repayment per recipient paid as $15,000 annually over a five-year service obligation), an agricultural-education repayment (about 3–4 recipients at $15,000 each over five years) and aviation repayment (one recipient annually; $15,000 for mechanics or $25,000 for pilots over five years). OHE also highlighted the self loan program (fiscal year 2024: 5,741 loans totaling about $60,500,000), which staff said is designed to be an alternative to private student loans for students with remaining unmet need.

On basic-needs, tribal relations and direct admissions: OHE described a basic-needs working group and a September 2024 report that identified housing, food, transportation and child-care interventions the state could support. The agency said it was selected to participate in a national basic-needs technical academy and reported a recent landscape survey of campus food resources. OHE also noted it recently hired a tribal relations director, Rafael Eubanks, and has begun government-to-government consultations and campus-tribal partnerships. On access, staff described the direct-admissions program (now in its third year) that sends participating seniors lists of Minnesota institutions that have committed to admit them; OHE said the program has expanded from 46 high schools in year one to 182 high schools this year and that, so far this year, more than 7,200 students have opted in and OHE has sent more than 47,000 application requests to Minnesota institutions.

Committee follow-ups and next steps: Committee members asked for more granular breakdowns (institutional shares of state grant dollars, independent student-parent counts, program exhaustions or carryovers). OHE staff said they will provide additional detail at a scheduled follow-up hearing focused on the state grant program and will supply requested breakdowns. Nikki Oliver, OHE director of government relations, clarified a question about the Hunger Free Campus appropriation: "the million was for two years," and statutory caps and match requirements limited the first-year outlay, she said, which is why about $500,000 was distributed in the first round.

The presentation included multiple requests from senators for slide-level or campus-level breakdowns; OHE said it would provide more detailed fiscal and recipient data in follow-up materials and at the subsequent hearing on state grants.

Ending: The committee scheduled a deeper dive on the Minnesota State Grant program at a future hearing; OHE staff said they will return with additional institutional breakdowns, recipient-level clarifications and data on program interactions.

Speakers quoted or specifically named in the presentation and Q&A are listed in the article’s speaker list below, and all numerical and program details above reflect statements made by Office of Higher Education staff to the Senate Higher Education Committee.