HF4898

Purpose

• To adjust how higher education costs are calculated and how families contribute to a student’s cost of attendance.
• To modify how tuition and fees are treated in these calculations and update related state grant funding rules.
• To set new rules for how costs are shared between dependent students, independent students, and students with or without dependents, including part-time students and those in correctional facilities.

Main Provisions

• Assigned family responsibility

  • For dependent students, the assigned family responsibility is 95% of the parental contribution.
  • If the parental contribution is between 0 and -1,500 dollars, the assigned family responsibility is 50% of that contribution.
  • If the parental contribution is less than -1,500, the recognized parental contribution is -1,500.
  • For independent students with dependents other than a spouse, the assigned family responsibility is 71% of the student contribution.
  • For independent students without dependents other than a spouse, the assigned family responsibility is 35% of the student contribution.
  • If the student contribution is between 0 and -1,500 dollars, the assigned family responsibility is 50% of the student contribution.
  • If the student contribution is less than -1,500, the recognized student contribution is -1,500.
  • For students enrolled less than full time, the assigned family responsibility is prorated by the ratio of enrolled credits to full-time credits.

• Cost of attendance

  • The recognized cost of attendance includes:
  • An allowance for living and miscellaneous expenses, and
  • An allowance for tuition and fees, which is the lesser of the average tuition/fees or a statutory maximum if one exists.
  • If there is no living/miscellaneous expense allowance in law, the living expense allowance defaults to 106% of the federal poverty guidelines for a 1-person Minnesota household for nine months.
  • If there is no tuition/fee maximum in law, the tuition/fees allowance defaults to:
  • The lesser of the average tuition/fees charged by the institution, or
  • For two-year programs: the highest tuition/fees charged at a public Minnesota state two-year institution; for four-year programs: the highest tuition/fees charged at a public Minnesota state university.
  • For part-time students, the cost of attendance is prorated by the ratio of credits enrolled to full-time credits.
  • For students in a Minnesota correctional institution, the cost of attendance includes only the tuition/fee component with no living/miscellaneous expense allowance.
  • Fees are defined as mandatory fees charged to full-time resident students; equipment/tools/computers owned by the student are excluded unless the institution owns them; mandatory fees are included, but optional or punitive fees are not.

• State grants and funding rules

  • If the year’s appropriation is insufficient, the other year’s appropriation can be used to cover the shortfall; funds are available until June 30, 2029.
  • A four-year program tuition/fee maximum is established as the lesser of:
  • The average tuition/fees charged by the institution, or
  • An amount equal to the highest tuition/fees charged at a public Minnesota university in the 2024-25 academic year, plus 2% for FY 2026 and plus 2% for FY 2027.
  • The base appropriation for these grants is set at 238,467,000 for fiscal year 2028 and thereafter.

Significant Changes from Current Law

• Revisions to how family contributions are calculated for both dependent and independent students, including explicit percentages and cap/gap rules for negative contributions.
• A change to the cost of attendance structure, introducing or updating living/miscellaneous expense allowances and tying tuition/fees allowances to either the institution’s average or a defined maximum, with special treatment for part-time students and incarcerated students.
• Introduction of a four-year program tuition/fee maximum formula and a schedule for automatic yearly increases (2% in FY 2026 and FY 2027), replacing prior unknown or different maximums.
• Updates to state grant funding, including cross-year appropriations flexibility and a multi-year availability period, plus explicit fiscal year budgeting for the cost of attendance framework.

Effects on Stakeholders

• Students and families: clearer, percentage-based rules for how much of parental or student resources count toward cost of attendance; potential changes in expected out-of-pocket costs depending on status (dependent/independent, full-time/part-time, with/without dependents, incarcerated).
• Higher education institutions: updated rules for computing aid eligibility and determining tuition/fee maximums that affect grant funding and student aid distributions.
• Government and taxpayers: new funding structure and spending timelines for state grants related to higher education.

Relevant Terms - assigned family responsibility - parental contribution - student contribution - cost of attendance - living and miscellaneous expenses - tuition and fees - tuition/fee maximum - maximum - dependent student - independent student - with dependents - without dependents - part-time/full-time - prorate - correctional institution - mandatory fees - public Minnesota state university - two-year programs - four-year programs - highest tuition and fees - federal need analysis - required grants - appropriation - fiscal year 2026, 2027, 2028 - basis for state grants