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Higher Education Grant Shortfall Makes Choice Easy for Policymakers

November 09, 2009 By John Fitzgerald, Education Policy Fellow & Lauren Benditt, Policy Associate

The state Office of Higher Education announced a $13 million shortfall in the Minnesota State Grant Program last week, the result of an impressive demand for higher education during these times of high unemployment.

However, as we see a greater demand for higher education, we also see a waning in the desire of our elected leaders to help these people survive in the 21st century workforce.

The brunt of the shortfall came as a result of a huge influx of students into the Minnesota State Colleges and Universities two-year college system. MnSCU projected enrollment would rise 1.6 percent over last year - far missing the true mark of 8 percent.

The program is helping 85,000 students attend two- and four-year colleges and universities in the state. The program will give out $158.4 million in grants this year - about $13 million more than the program's $145.5 million budget. Nearly all the program's funding comes from state appropriations.

This leaves the program with two choices: Get more money from the Legislature and Gov. Tim Pawlenty, or adjust its admissions formula to cut the number of students who qualify for the grants, thereby cutting the number of students who can afford to go to school.

One avenue was immediately ruled out. Pawlenty's spokesman, Brian McClung, told the Star Tribune that the governor would not include more appropriations for the program in his upcoming budget recommendations. "The State Grant Program will need to stay within its biennial appropriation," McClung said.

The Office of Higher Education has the ability to adjust the formula it uses to determine how much in state aid is distributed to students in case of funding shortfalls. The office will likely look into changing the formula before the next school year.

The cost of attending a two-year college in Minnesota is currently the third-highest in the nation. The average tuition and fees for one year at a two-year MnSCU school is $4,500. The average tuition and fees at a four-year MnSCU school is $6,404 and $10,307 at the University of Minnesota, without adding costs for room and board. Average tuition and fees at private four-year colleges and universities in Minnesota is $28,136, without room and board.

The state unemployment rate stands at 7.3 percent and the national unemployment rate is more than 10 percent. For many of these unemployed workers, the layoffs are a wakeup call to add new skills or hone existing ones, or to prepare themselves for jobs that are not available today but lie on the horizon. To feed Minnesota's economic engine, these workers must be given their lead to learn new skills and prepare for new jobs. To do anything less amounts to slitting our own economic throat.

Today, 85,000 Minnesotans need this grant money to attend school. Will that number be any less at the beginning if the new school year? Minnesota's policy makers must fund this grant program. To do anything less will deplete the capacity of Minnesota's workforce to improve productivity and innovation, causing the quality of life in our state to suffer.

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