COVID-19 provisions passed

As part of the first COVID-19 relief package, the Legislature granted temporary powers to the Office of Higher Education to help students deal with effects of the pandemic both financially and academically.  

The higher education provisions passed as part of the March 26 bill include providing temporary emergency powers to the commissioner of the Office of Higher Education to prepare for or respond to a COVID-19 outbreak. The temporary powers allow the commissioner to waive rules and statutes for the following programs in order to protect the financial stability and academic standing of students:

  • Work Study
    • State Grant
    • SELF Loan programs
    • Other state grant, aid, and scholarship programs under Minnesota Statutes 136A

On April 17, interest rates were reduced to 0% for Minnesota SELF loan and SELF loan Refi borrowers, retroactive to March 13 and extending to September 30. Six-month COVID-19 forbearances are also available, upon request, and no late fees will be charged through the end of September.  

These changes will benefit over 43,000 Minnesota SELF Loan or SELF Refi borrowers. These new provisions are at or near the top of the most flexible and beneficial student loan provisions in the nation.

Recipients of state financial aid will also see increased flexibilities and benefits. Some of the changes include:

  • Students in State Work Study programs will continue to be paid for hours they were scheduled to work
  • Students who withdraw from classes will be allowed to keep their financial aid awarded for spring term and will not be asked to pay it back. This applies to the following programs:
    •  State Work Study
    • Minnesota State Grant (including funds paid via the Minnesota Dream Act)
    • Grants for Students with Intellectual and Developmental Disabilities
    • MN Reconnect
    • Postsecondary Child Care Grants
    • Minnesota Indian Scholarships
    • Teacher Candidate Grants
  • Grant eligibility will be reinstated for students who withdraw from enrollment during the COVID-19 emergency for the following programs:
    • Minnesota State Grant
    • Postsecondary Child Care Grant
    • Minnesota Indian Scholarship
  • Postsecondary Child Care Grants will continue to be paid for students whose eligibility changed due to COVID-19 (SF 3683)

Non-COVID provisions passed

Limited Higher Education Bill Passes

A scaled back Higher Education policy bill passed in the final days of the 2020 session that addresses 529 college savings plan conformity and higher education school closure provisions. No supplemental budget provisions were discussed or passed as part of the final negotiations.

“Argosy” closure bill provisions pass

The bill passed provides safeguards for students if schools close, especially private for-profit institutions. The abrupt Argosy school closure last year left close to 1,000 Minnesota students with no degree completion options, student debt, difficult credit transfers, and limited job prospects. The new regulations will safeguard students and hold schools accountable.

The bill provisions include:

  • OHE can terminate an institution’s eligibility for state aid if they lose their eligibility for federal aid
    • Institutions must provide compliance audits required under federal law instead of a certified audit
    • Schools must have a process to receive and act on student complaints
    • OHE may revoke a school’s registration if they fail to have enrollment in the last two years
    • OHE may revoke a program’s approval for failing to have enrollment for two years unless the program requires an extensive approval process
    • Schools exempt from licensure or registration can lose their exemption for false advertising
    • A new fee is established for schools that use OHE for the administration of its SARA agreement
    • Annual registration fee was raised from $1,200 to $1,500, roughly the amount of inflation
    • OHE may investigate an institution for statutory compliance
    • OHE may revoke a license for using fraudulent or coercive practices in MN or elsewhere
    • All penalties listed above are subject to appeal

FAFSA goal to be set

The bill requires that a goal be set for the percentage of high school seniors applying for the Free Application for Federal Student Aid (FAFSA). Taking the first step by applying for federal aid can help students feel ready to go on to college, stay in school, and be academically successful. The FAFSA application helps students determine eligibility for all tuition aid no matter what type of institution they decide to attend: two- or four-year, public or private, and certificate, associate, or bachelor’s degrees.

Sexual assault definition changes

Students can also feel safer reporting a sexual assault with a new definition passed in the bill. An “incident” is limited to a single report of sexual assault, regardless of the number of complainants, respondents, or whether the identity of a party is known by the institution.

Bill aims to help more American Indian students attend college

To help more American Indian students enter and succeed in college, the billestablishes the Tribal Nations Education Committee which will be involved in program establishment. The OHE commissioner must consult with this committee on American Indian students’ post-secondary education. In fall 2014, 44% of American Indian students attended college, compared to 72% of their white peers, 70% Asian enrollment, 60% black enrollment, and 51% Hispanic.

Other policy provisions adopted:

  • Unpaid student balances: Forbids a postsecondary institution receiving state financial aid from withdrawing a student from class or suspending a student due to an unpaid student account balance
  • Childcare grants: Allows postsecondary institutions offering only graduate or professional degrees to participate in OHE’s Child Care Grant Program
  • OHE Policy: The Senate version of the OHE Policy Bill was accepted by the House and governor in its entirety with one exception—the deletion of three sections which made reference to K-12 expenses in Article 2. The deletion of this language does not change how 529 accounts are administered with regard to K-12 expenses
  • Student and taxpayer protections: Several of the provisions from the governor’s Supplemental Budget bill were accepted to provide important student and taxpayer protections while agreeing to leave the more controversial sections that needed further work out of the bill for this year. OHE has committed to continuing work with stakeholders over the interim to produce a bill for the Legislature to consider early in session next year

Bill conforms to federal 529 college savings plan changes; K-12 tuition provisions deleted

The bill changes laws governing the Minnesota college savings plan: Minnesota’s section 529 plan. Most of these changes are to account for recent changes to federal law. The 529 provisions were narrowed to help matching grant account holders access their savings and avoid a prolonged battle about whether K-12 expenses are a qualified higher education expense. The K-12 tuition expense sections have been deleted as part of the overall agreement.

The main federal provisions the article responds to include permitting qualified distributions for:

  • Apprenticeship program expenses
  • Student loan payments for the beneficiary or the beneficiary’s sibling
  • Permitting rollovers to Achieving a Better Life Experience (ABLE) Accounts


Bills not passed

Supplemental Higher Education Funding

Minnesota law says the Legislature should provide at least 67% of the funding for public post-secondary schools, and the remaining 33% is intended to be provided through the students and families. Unfortunately, the percentages in funding have been reversed, with the Legislature now providing about one-third of the necessary funding for higher education. Despite DFL pressure to increase investments, the Republicans have consistently ignored the needs of students, their families, and Minnesota’s higher education institutions. As recently as 2018, the Republican Senate provided a $0 funding increase for higher education programs, and other budgets have completely ignored requests made by the U of M.

The Senate Republicans announced their plans for the session and pointed to continued job-training programs and economic development through higher education but did not roll out any strong signals on a higher education supplemental budget or student loan-relief plans. From February 11 to March 12, the Senate Higher Education Committee did not hear any supplemental budget-related bills, despite the need expressed by students, their families, and institution officials and staff.

Minnesota State this session made a supplemental budget request of $54.2 million for FY20-21. Of that, $39.7 million will be used for tuition relief and campus support, and $14.5 million will be used for NextGen – MinnState’s largest technology modernization upgrade in the system’s history. The University of Minnesota did not make a supplemental request and instead focused on their capital investment request.