SF4762

Purpose

• Modify how the state determines financial aid for students by changing the lowest recognized family responsibility amount used to calculate state grant awards.
• Update how assigned family responsibility is calculated for different student types and enrollment situations.
• Allow adjustments to grant funding rules if there are surplus funds in a given biennium, and require adjustments to be limited to the current year without carrying forward.

Key terminology and definitions (as used in the bill)

• Assigned family responsibility: the portion of a family’s contribution to a student’s cost of attendance used to determine state grant aid.
• Parental contribution: the share of a dependent student’s cost of attendance contributed by the student’s parent(s), as determined by a federal needs analysis.
• Student contribution: the share of a student’s own resources (or the student’s family in certain cases), as determined by a federal needs analysis.
• Federal need analysis: the method used to calculate expected contribution from family and student toward the cost of attendance.
• Living and miscellaneous expense allowance: a budget component used in calculating grant awards.
• Dependent student: a student who is financially dependent on a parent(s).
• Independent student with dependents other than a spouse: a student who is independent and has children or other dependents (not including a spouse) dependent on them.
• Independent student without dependents other than a spouse: a student who is independent and does not have dependents other than a spouse.
• Negative parental contribution / negative student contribution: scenarios where the calculated contribution is a negative amount.
• Prorate: adjust the assigned family responsibility proportionally for part-time enrollment.
• Surplus appropriation: extra available funds beyond projected grant demand that can trigger adjustments to expenses or contributions.

Main provisions

• Assigned family responsibility calculations (Section 136A.101, subdivision 5a):

  • Dependent students: assigned family responsibility is 95% of the parental contribution.
  • If the parental contribution is between 0 and -1500: assigned family responsibility is 50% of the parental contribution.
  • If the parental contribution is less than -1500: recognized parental contribution is -1500.
  • Independent students with dependents other than a spouse: assigned family responsibility is 71% of the student contribution.
  • Independent students without dependents other than a spouse: assigned family responsibility is 35% of the student contribution.
  • If the student contribution is between 0 and -1500: assigned family responsibility is 50% of the student contribution.
  • If the student contribution is less than -1500: recognized student contribution is -1500.
  • If the student or parental contribution is less than 0, assigned family responsibility is 0.
  • For students enrolled less than full-time: assigned family responsibility is prorated based on the ratio of enrolled credits to full-time credits.

• Surplus appropriation and adjustments to assigned family responsibility (Section 136A.121, subdivision 7a):

  • If the office determines there is more than enough funds to cover projected grant demand in the second year of the biennium, it may:
  • (1) increase the living and miscellaneous expense allowance in the second year, up to an amount that still leaves enough funds to cover projected grant demand; or
  • (2) adjust how negative contributions are treated by recognizing a negative parental contribution or a negative student contribution less than -1500 as equal to the lowest student contribution under the federal needs analysis.
  • These adjustments can be made one or more times.
  • When there are more than enough funds, the office must balance the need to fund grant demand with the goal of fully allocating the state’s grant appropriation.
  • Any increase in the living and miscellaneous expense allowance or the adjusted assigned family responsibility applies only in the current biennium and does not carry forward to the next one.

• Administrative note: Section 3 is included but not described in the provided text.

Significant changes to existing law

• Returns to defined rules for assigned family responsibility by explicitly setting percentages for dependent and independent students and establishing special handling for negative contributions, including a floor of -1500 for negative contributions.
• Adds a formal mechanism to use surplus funds to temporarily increase the living and miscellaneous expense allowance or to adjust negative contributions to the lowest federal-needs-based figure, with limits so these changes do not carry into the next biennium.
• Introduces prorating for part-time students within the assigned family responsibility calculation.

Practical impact and who is affected

• Students and families will see changes in how much of their costs the state grant program expects them to contribute, and how grants are awarded based on those contributions.
• Part-time students will have a prorated assigned family responsibility, potentially affecting their eligibility or grant size.
• In years with extra funds, the state may temporarily boost living expenses for grant recipients or adjust the calculation to recognize a larger negative contribution floor, increasing grant awards in the short term.

Implementation considerations

• Requires accuracy in applying federal need analysis results to determine parental and student contributions.
• Requires administrative processes to monitor fund sufficiency and to implement one or more adjustments within a biennium.
• Ensures that any adjustments funded by surplus do not carry over into subsequent years.

Sec. 3 note

• The content of Section 3 is not provided in the excerpt.

Relevant Terms - Assigned family responsibility - Parental contribution - Student contribution - Federal need analysis - Cost of attendance - Living and miscellaneous expense allowance - Dependent student - Independent student with dependents other than a spouse - Independent student without dependents other than a spouse - Negative parental contribution - Negative student contribution - Prorate - Surplus appropriation - Full-time enrollment - Part-time enrollment