Higher education is cut by $351 million in the agreement reached between Governor Dayton and the Legislature, a 12 percent cut in general fund support in FY 2012-13 and slightly less than in the legislative budget. As a result, the state’s investment in higher education will fall below FY 2000-01 levels (and that’s in actual dollars, not inflation-adjusted). These cuts will jeopardize Minnesota’s future economic success, creating challenges for students seeking to improve their skills and for employers counting on hiring an educated workforce.
The working agreement cuts funding for the University of Minnesota by $194 million in FY 2012-13, or 15 percent. The Legislature originally approved a 19 percent reduction and the Governor a six percent cut. The agreement also includes language proposed by the Legislature that holds back about $5 million, making the funds contingent on whether the University of Minnesota meets three of five goals: increasing institutional financial aid, producing at least 13,500 degrees, increasing graduation rates on the Twin Cities campus, maintaining spending on research and development, and maintaining sponsored research. The agreement does not include language encouraging caps on tuition increases that was in the Legislature’s bill.
The Minnesota State Colleges and Universities (MnSCU) system is cut by $170 million in FY 2012-13, a 13 percent reduction, which is close to the 14 percent reduction approved by the Legislature in May. The Governor had recommended a six percent reduction. The agreement also adopts language proposed by the Legislature that holds back about $5 million and makes the money contingent on whether MnSCU meets three of five goals: increasing the enrollment of students of color, increasing the number of students taking online courses, increasing the number of credentials earned, increasing completion rates and decreasing energy consumption. The agreement also caps tuition increases at state colleges at four percent in FY 2012. There are no caps on tuition increases at state universities or on fee increases, as there were in the Legislature’s bill.
There is some limited good news for students as far as financial aid. The working agreement adopts the Legislative proposal to increase funding for the State Grant program by $21 million in the FY 2012-13, or seven percent. While this was the higher of the two proposals on the table, the amount still falls short of the $35 million needed to fund financial aid for all qualifying students, so the Office of Higher Education will have to ration the existing funds by issuing smaller and/or fewer grants. The State Grant program provides financial aid for approximately 85,000 low- and moderate-income Minnesota students every year.
Other programs that help students afford higher education will see cutbacks as well.
- The Achieve Scholarship, which helps approximately 130 high achieving, high-need students access higher education, is eliminated.
- The American Indian Scholarship program is cut by eight percent. At least 32 fewer students will be able to access this financial assistance.
- General fund support for the Minnesota College Savings Program, which provides approximately 2,500 low-income families with a state match when they save for college, is phased out.
- State funding for work study, which pays 75 percent of wages for qualifying campus and community jobs, will be cut by three percent in FY 2012-13.
The Office of Higher Education, which provides administrative support for the state’s college and university system and manages the state’s financial aid programs, is cut by five percent in FY 2012-13.
We know the state will need to produce more workers with degrees and credentials over the next decade to keep Minnesota’s economy competitive. However, the compromise agreement means Minnesota will fail to maintain the investments we need to create the workforce of the future.