Minnesotans favor public funding for student aid over institutions
Public resources for higher education are limited, and policymakers are forced to make choices for how they are used. Every year the Legislature debates how public investment can best help keep college affordable for all Minnesotans regardless of their ability to pay. The debate generally revolves around two different philosophies: 1) provide subsidies to public institutions (the University of Minnesota and Minnesota State Colleges and Universities) to keep tuitions low for all students enrolling in those institutions or 2) provide financial aid directly to students with proven financial need and allow the student to choose the institution that they prefer — public or private.
Over the past few years, much attention has been paid at both the Capitol and in the media to controlling tuition at the state’s public institutions. Advocating for more resources for public systems ignores the role state-financed aid plays. A focus on institutional support also ignores the public’s read of the options.
In last year’s University of Minnesota Center for Survey Research Poll, 56 percent of respondents said the Legislature should allocate more funds directly to students to help pay for higher education. Only 13 percent said more money should go directly to public institutions. The question was administered to 725 people and had a +/- 3.4 percent sampling error.
Given that higher education funding decisions are made within a political environment, it is worth noting that perspectives are similar regardless of respondents’ political identification. For those who identified themselves as Democrats, 58 percent favored more money for students while only 16 percent thought more money should go to the systems. For Republicans, 41 percent thought we should give more to students versus 15 percent to institutions. Among independents, 57 percent favored more money for students and 12 percent to institutions (sampling error +/- 6.8). More Republicans believe the balance is about right, suggesting that they may be more likely to support the status quo.
In fiscal year 2007, Minnesota spent $1.41 billion on higher education. Of that, 87 percent went directly to the state’s public institutions while 11 percent went to the more than 80,000 low- and middle-income students who qualified for the State Grant Program, the state’s financial aid program. This distribution has held steady over the past several years. Most of the students who receive these grants attend the state’s public institutions (69 percent); 12 percent attend nonprofit private colleges that are members of the Minnesota Private College Council. (The 2002 study, Financing Higher Education Today PDF (180 KB), found that state grants are a critical part of the financial aid for graduates from low income families. These students reported post-baccalaureate income and employment equal to graduates who did not receive state grants.)
"The key to ensuring a well-educated workforce is to encourage students to go to the college or university that best fits their needs — not just to fund state institutions that students may or may not want to attend," said David Strom, president of the Minnesota Free Market Institute. "It's vital to ensure both access and excellence in higher education, and the best way to do that is to focus more on the students’ needs."
Research on financial aid awards, especially for low-income familes and minorities, consistently shows positive effects on enrollment and persistence of students, according to Dane Smith, president of Growth & Justice. "Financial burden is one of the prime barriers that keeps most Minnesotans (of all racial backgrounds) from completing a post-secondary degree. Our goal at Growth & Justice is to increase the number of post-secondary degree completers — not just enrollees. And increasing the share of financial awards in the form of need-based aid will decrease the loan amounts that low-income and middle-income families are bearing," Smith said.