More than $400 million in federal stimulus funds are expected to flow to Minnesota's public colleges, yet leaders of the systems say it will not be enough to wipe away budget deficits caused by the pandemic.
The University of Minnesota is anticipating $98 million for its five campuses from the Biden administration's American Rescue Plan, which Congress passed in March, while the Minnesota State system estimates its 37 colleges and universities will get $328 million collectively. At least half of that money must be spent on financial aid for students, with the other half available to cover institutional losses.
"I can't imagine getting through this crisis without these additional funds," said Myron Frans, the U's senior vice president of finance and operations, during a state Senate Higher Education Committee hearing Thursday. "We hope to be able to use it as effectively and efficiently and as fairly as we can."
The U is facing an estimated $170 million shortfall this fiscal year, driven by revenue losses in athletics, tuition and room and board, among other things. The most recent stimulus funding and another federal aid package passed in December will cover only about $86 million of that deficit, administrators said.
The university plans to cover the remaining balance with about $38 million from budget cuts and reserves and a $45 million loan for the athletics department, U budget director Julie Tonneson said. The U has not used any federal funding to cover athletics revenue losses.
"That's why we're looking at a loan to close their gap," Tonneson said.
The Minnesota State system is grappling with a projected $48 million budget gap this fiscal year. That hole won't be completely covered by the stimulus funding because the system's shortfall is not entirely pandemic-driven, and colleges can only use the federal money to cover losses associated with COVID-19, said Bill Maki, Minnesota State's vice chancellor for finance and facilities.
Additionally, Maki noted that the federal government distributed funding to each Minnesota State campus individually rather than to the entire system.
