Minnesota State will allow schools to raise fees despite tuition freeze

The Minnesota State system will allow its colleges and universities to raise student fees even as it prepares to freeze tuition.

The DFL-led House and Senate passed a bill last week that would give the system $1.87 billion in funding over the next two years, a $293 million increase. The bill requires the system to freeze tuition for most undergraduate students and says that freeze "may not be offset by increases in mandatory fees, charges, or other assessments to the student."

The funding is included in a package that provides an additional $650 million for higher education programs across the state, including money to cover free tuition for some students. The bill is awaiting a signature from Gov. Tim Walz, whose office says he will likely sign it next week.

Minnesota State trustees voted unanimously Wednesday to change system policy to allow schools to raise some fees.

System administrators and an organization representing students at the system's seven universities argue increased fees could provide crucial funding to help cover student needs, which changed amid the COVID-19 pandemic.

But an organization representing students at its 26 two-year colleges argues an increase could prove burdensome for students and sour the system's relationship with state lawmakers.

"The legislative language is clear that Minn State can not raise any mandatory student fees," John Runningen, president of LeadMN, which represents college students, told trustees in a public meeting Tuesday. "To do so violates the state law and breaks the trust of the Legislature."

The policy change increases the amount that system schools can charge in fees that it labels discretionary. Vice Chancellor of Finance and Facilities Bill Maki said the system calls the fees discretionary because each university or college can decide whether it wants to charge them; but once administrators have signed off on the fees, it's generally considered mandatory for students to pay them.

Tuition and fees at system colleges average about $6,100 per year, including about $650 in discretionary fees, compared to about $9,900 at system universities, including roughly $1,215 in discretionary fees.

The discretionary category comprises multiple types of fees, including ones aimed at covering the cost of student clubs, health care, athletics and technology. Trustees are also allowing schools to charge a new fee to cover projects promoting environmental sustainability.

LeadMN estimates that if a school were to increase fees to all the new, proposed maximums, students could be charged an extra $243 per year. Maki told trustees that schools are unlikely to charge that rate and that, if schools want to increase their fees by more than 2% or 3%, they have to get approval from students in a referendum. The specific rates will be set during the budgeting process next month.

Maki said he is confident the change falls within the bounds of state law, based on information the system received in prior years, when lawmakers also froze tuition and prohibited the system from increasing mandatory fees to offset those costs. He said the discretionary fees cover services that would not be covered by tuition or state funding.

"In a sense, they're different colors of money, and we do share with the Legislature our different streams of budgeting," Maki told trustees. "State appropriation and tuition are the largest components, but we have the fees and we have other revenues that support mission critical activities."

Students United, an organization representing students at the system's four-year universities, said the change aligns with their needs.

"We want to reiterate that our support for this discretionary fee stems from the power it grants to students," the group wrote in testimony submitted to the board. "Students will have the ability to choose what is most suitable for their campuses' financial capacity and student preferences, which is very important to our student leaders."

LeadMN had urged trustees to postpone their vote.

"This proposal is bad politics and sends the wrong message to elected officials," Runningen told trustees. "After giving historic funding to the system, the system is looking at raising costs. Legislators will view this as Minnesota colleges and universities can not be trusted to keep costs in line, so why continue to give them more money?"

Rep. Gene Pelowski, DFL-Winona, who chairs the House higher education committee, said, "My only complaint with fees is if it's ever used to offset some type of tuition."

Still, he added, "We'll monitor that very closely."