Nearly half of all Minnesota undergraduates take out loans to pay for college, and students may have a harder time getting state aid money to help pay for it if Gov. Tim Pawlenty’s budget cuts go into effect.
Pawlenty announced his recommendations for solving the state’s $1.2 billion deficit last week, which included more than $53 million in cuts to higher education.
The Office of Higher Education is likely to endure $6.7 million of the cuts, meaning less money would be funneled into state grant and work study programs, making less money available to fewer students. On top of that, however, the state grant program is already facing a $41.6 million dollar shortfall for the current biennium.
“There’s not enough money to make the grants under the current formula,” said Christopher Halling, financial aid director for the Minnesota State Colleges and University system. “It’s a significant amount of money that isn’t going to be there.”
Changes to the grant program would affect the more than 90,000 students that rely on it to help pay for college each year. Tricia Grimes, policy analyst for the Minnesota Office of Higher Education, said 7,000 students could be cut off from the program entirely.
Currently, grant-qualifying students receive an average of $1,673 each year, but that average award would go down to $1,420 — a near 15 percent reduction.
But Grimes is hopeful the decrease in grant money won’t determine whether a student attends college.
“One would hope that a reduction in award of around $300 a year wouldn’t be enough to make it or break it for a student’s ability to attend, but there are probably students who will really struggle with that,” Grimes said.
Preliminary planning for the smaller budget also calls for a 16.7 percent cut to the state’s work study program over the next two years, according to a preliminary budget plan released by the Office of Higher Education. The program provided need-based financial aid to about 11,000 students in 2008-09, and Grimes said that number would be cut by about 2,000 students.
The governor’s budget cuts would also eliminate the ninth semester of eligibility for the state grant award and the Summer Transition Grant, together estimated to save the state about $8.8 million over the next two years.
Although not the final say on where the state’s budget cuts will take place, lawmakers say the governor’s proposed cuts to higher education will likely be in line with their own.
The state Office of Higher Education is still weighing its options on how to deal with the impending cuts, and no final decisions will be made until the Legislature and the governor agree on a budget plan later in the session.
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