Financial aid policy
A Longstanding Commitment to Success
For decades, the State of Minnesota and the federal government have recognized the importance of an educated workforce. A strong, diverse postsecondary education enterprise contributes to social and economic success. Since the 1960s, the financial aid system has been a primary tool for providing equitable opportunity for students with the highest need. In 1983, the Legislature established the Design for Shared Responsibility for the Minnesota State Grant Program as the backbone of Minnesota's student financial aid system. The idea is simple and fair: the student, as the principal beneficiary of a postsecondary education, bears the first responsibility for paying for it. Next, the family is expected to contribute a reasonable amount of support for the student. Finally, state taxpayers help cover the remainder of the attendance costs, if needed.
Minnesota's student financial aid system, driven by the shared responsibility principle:
- Acknowledges the student's responsibility to invest in his or her own future
- Reduces the disproportionate cost burden on low- and moderate-income families
- Provides students with a choice among the postsecondary institutions and programs that best meet their needs, whether two- or four-year programs or delivered by public, private, for-profit, or not-for-profit institutions.
By promoting fairness, equity and choice in higher education, Minnesota invests in its future.
An issue of fairness
The Minnesota State Grant Program allocates the costs of going to college differently than the traditional financial aid model used by the federal government and most other states. Under the traditional model, students from low- or moderate-income families often assume the heaviest proportional burden of paying for college. This creates conditions which limit their education choices.
In contrast, the Design for Shared Responsibility apportions the cost of attending college to students, families and the federal and state governments. As the family's ability to pay their portion of the recognized price increases, the taxpayers' contribution is made smaller. This policy enables students from low- and middle-income families to choose the institution that best meets their needs, while still requiring them to pay part of the cost.
The Design for Shared Responsibility requires that state policymakers review and adjust three key policy variables:
- The amount of actual tuition and fees eligible for financial aid, called the "recognized price of attendance," which is capped at $9,838 for four-year and $5,808 for two-year institutions in 2008-09 (the four-year cap currently represents less than half of average tuition and fees costs at MPCC-member institutions)
- A Living and Miscellaneous Expense Allowance (LME) for all students, now set at $6,200
- The Assigned Student Responsibility, currently set at 46 percent of the recognized price
Recent state grant spending
Three-quarters of state grants awarded in Fiscal Year 2006 were awarded to students from families with adjusted gross incomes under $50,000 per year, Minnesota's approximate median family income. More than 25 percent of private college students come from families with incomes less than $50,000 — about the same proportion as at the state’s public four-year colleges and universities.