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Last year, Minnesota enacted legislation to help defray the costs of higher education, called the North Star Promise. The program is designed to create a tuition- and fee-free pathway to higher education for families with household incomes below $80,000. But many may not be aware of program implications for Minnesota’s highest-need students or that money intended to support the total cost of attending college may be displaced in the process.
In greater Minnesota, higher education is an essential ingredient in building community wealth, moving rural places forward and keeping talent close to home. Unfortunately, the total cost of attending and completing college is an enormous burden on households across the state. The most recent State of Higher Education report found “cost” to be the top reason people choose not to attend college, alongside dozens of barriers to college completion ranging from the need to work or support dependents while studying and making enough academic progress to satisfy aid requirements.
That’s why so many civic organizations and institutions like ours provide scholarships or grants to help local students surmount the barriers, complete their studies and land well-paying jobs. And it’s why some advocates for higher education accessibility are working to educate the public about the fine print of programs like North Star.
As anyone navigating the college application process can tell you, financial aid is complicated. Imagine a glass representing the total cost of college that needs to be filled. Scholarships can typically be used to fund anything in the glass, such as transportation, tuition, housing or food. Tuition accounts for 34% of the total cost of attending college in Minnesota, so let’s envision that the bottom one-third of the glass represents this.
Programs like North Star are used to fill only the tuition portion of the glass and aid starts only after tallying any Pell grants, state grants, institutional awards and scholarships. If those funds do not cover the bottom third, the state promises to cover the tuition balance. Programs like this are called “last-dollar” financial aid because they top off tuition after pouring in the other aid first.
This structure means that Minnesota’s highest-need students will likely see reduced benefit from North Star since the bottom third of their glass is typically already filled with maximum available Pell and state grants. Is it better than not to have tuition support from the state? Depending on a student’s family income bracket, yes. But ideally, none of the funding a student receives that is intended to help defray the total cost of attending college should count against and reduce another part.