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Dems cut price tag of community college aid bill

Mike Mullen//April 8, 2015

Dems cut price tag of community college aid bill

Mike Mullen//April 8, 2015

Senate Democrats wanted to make community college more affordable — free, in fact — for Minnesota residents. But first they found a way to make the idea itself more affordable.

The new, reduced-price version of Senate File 2, among the DFL’s flagship proposals in the upper chamber this year, was relaunched with a press conference and a hearing Tuesday in the Senate Higher Education and Workforce Development Committee. Implementing the legislation would cost about $24 million out of the 2016-17 budget, and $30 million in the 2018-19 “tails” budget.

That’s a fraction of earlier estimates, and something of a boon to its author, Sen. Leroy Stumpf, DFL-Plummer. Stumpf explained that the pared-down figure owes to a new funding mechanism, with the general fund budget responsible on a “last-dollar” basis. Under this formula, students would rely on existing Pell Grants and the Minnesota State Grant Program to pay for tuition, and the new funds would be used to cover any remaining balance.

The funding would be eligible to Minnesota residents with family incomes of less than $125,000, more than two times the current eligibility cap for the state grant. Students would have to enroll in qualifying career and technical colleges through the Minnesota State Colleges and Universities (MnSCU) system.

Stumpf and other Democrats, including Senate Majority Leader Tom Bakk, have said the proposal could help alleviate the “skills gap,” especially in Greater Minnesota. Stumpf said there are over 400 manufacturing firms based in northwestern Minnesota alone, and the bill could help churn out more highly-trained employees.

An estimated 3,500 students would take advantage of the program, receiving an average of about $3,500 per student.

Another $2.7 million would be used to administer a mentorship program through the Office of Higher Education. Stumpf said the use of mentors had proven “very important” in the Tennessee program on which his bill is modeled. Mentors would meet with grantees on a weekly basis to discuss coursework, social skills and financial planning, among other topics.

“When you look at the actual cost of trying to provide skilled workers into the economy of Minnesota, that’s a very reasonable cost,” Stumpf said in his press conference.

The student participation level is considerably lower than the earlier estimate of 25,000-some students, which had contributed to the bill’s earlier cost projection north of $100 million. Stumpf observed that Tennessee’s new system was expected to pay for 25,000 students, but more than 40,000 eventually took advantage.

“It’s hard to guess exactly what the students will do,” Stumpf said. “You may have some students who have gone off to different type of education in a four-year program that will … switch their emphasis over to learning a skill.”

During the subsequent hearing, members were informed of the difficulty of calculating an ultimate cost estimate. If a student currently enrolled in a state university moved to a less expensive two-year college, the state could pay less in aid, or none at all, if the student’s federal Pell Grant covered all of tuition fees.

Participants would need to maintain at least a 2.5 grade point average (GPA), a requirement which the Office of Higher Education said contributes to its estimate that some 30 percent of recipients would not renew their aid for a second year.

The bill received a generally positive reception in the higher education committee, as members from both parties applauded Stumpf’s idea. Sen. Julianne Ortman, R-Chanhassen, said the bill has the “right purpose in mind,” but was concerned about the provision limiting grants to recent graduates.

“I’m afraid we’re serving the population we’re already serving,” Ortman said, “not reaching a new population of folks that haven’t considered going to college, but would be capable of going to college.”

Stumpf replied that he did want to reach people who might not otherwise consider college, and cited that need as the cause for the proposal’s expansion to include holders of Adult Basic Education (ABE) or a GED.

Steve Hine, director of labor market research at the Department of Employment and Economic Development, said the state’s labor force is expected to grow at a slower rate than seen in the last three decades. Hine said Minnesota’s economy would be “impeded by extremely tight labor market conditions,” and many skilled employment sectors would see shortages of qualified applicants.

Hine said the bill could be an “effective mechanism” to help “disadvantaged but growing subgroups,” such as racial and ethnic minorities. A 2013 survey found that 45 percent of white Minnesotans had at least a two-year associate’s degree, compared with 28 percent of black Minnesotans and 16 percent of Hispanics.

Sen. Carla Nelson, R-Rochester, said she likes the mentorship aspect of the program, but said it should also help guide students to areas of study that are most likely to see job growth and vacancies.

“When we use targeted public dollars there’s always a high competition for those dollars,” Nelson said. “I think it’s important as policymakers we help incent the students … being aware of what those job prospects are.”

Higher Education Commissioner Larry Pogemiller was not in attendance but, in a statement read on his behalf, said programs like the one before the committee can only succeed with “adequate” funding to existing financial aid systems. Gov. Mark Dayton’s supplemental budget proposal called for an additional $20 million to be added to the state grant program

The committee ultimately held the bill over for inclusion in the higher education omnibus. Committee chair Sen. Terri Bonoff, DFL-Minnetonka, described the proposal as an “important” one.

“It really does make a statement to our students how important we think it is that they do participate in post-secondary education, and that they do consider where the jobs are,” Bonoff said.

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