Minnesota Lawmakers Leave $131 Million Student Aid Shortfall Unfixed As Session Ends

For the third straight year, Minnesota can’t fund its need-based State Grant at the level students qualify for. 

The Minnesota House approved the higher education conference committee report Friday night on a 101-33 vote but the package does nothing to fix the $131 million shortfall in the State Grant program. Without new money, students face an estimated 38% across-the-board cut in awarded funds and 18,000 students lose their grants entirely heading into fall.

 HF4252, sponsored by Rep. Dan Wolgamott  and Sen. Omar Fateh, cleared the House with bipartisan support after the conference committee signed off Friday. It now heads to the Senate before the session adjourns Monday.

Wolgamott himself flagged the gap: “It’s disappointing we didn’t have a target to address that gap.” The Senate’s proposed $52 million one-time appropriation was stripped from the final agreement earlier in the week.

By The Numbers

• $131 million: Projected shortfall in the Minnesota State Grant program for the 2026-27 academic year
• 88,000: Students expected to receive State Grants next year
• 18,000: Students who would lose their grants entirely under rationing
• 38%: Estimated overall reduction in awards, per the Minnesota Private College Council
• $52 million: One-time appropriation proposed by the Senate that was dropped from the final budget deal
• $6.5 million: Annual State Grant dollars flowing to for-profit colleges. An amendment to redirect that money failed
• ~6%: Year-over-year growth in State Grant recipients in both 2024 and 2025

What’s behind it: Enrollment is climbing after a decade of declines, helped by the North Star Promise, which offers free tuition to families earning under $80,000 at public colleges. The new FAFSA formula also surfaced more financial need than projected. Tuition continues to rise state-wide and state funding has not kept pace for three consecutive years.

What’s next: The Senate must concur on the conference report before adjournment Monday, May 18. Minnesota’s Office of Higher Education has a Lumina Foundation grant to design a more stable State Grant model, and lawmakers say they expect a smaller gap next academic year but no relief is coming for students this fall.

How This Connects: The Minnesota State Grant tops out at roughly $1,415 at a public two-year college and $6,439 at a private four-year college, with an average award near $3,406, according to The College Investor’s Minnesota financial aid data.

A 38% cut translates to thousands of dollars per recipient — money most students won’t be able to backfill. NASFAA research has shown even modest aid reductions raise the likelihood a student stops out before completing a degree.

Bottom line: Minnesota’s higher ed bill passes with bipartisan support but leaves the biggest problem (a $131 million hole in the program that actually pays students’ tuition) unsolved heading into fall.

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