HF4266

Purpose

This bill makes changes to how Minnesota determines a student’s eligibility for state grant awards by adjusting the method used to calculate the family’s share of education costs and by giving the state more flexibility to adjust grant-related amounts if there is surplus money in the grant program.

Main Provisions

• Assigned family responsibility (Section 1)

  • The bill defines assigned family responsibility as the family’s contribution to a student’s cost of attendance, as determined by a federal needs analysis.
  • For dependent students:
  • Assigned family responsibility equals 95% of the parental contribution.
  • If the parental contribution is between 0 and -1500, assigned family responsibility is 50% of the parental contribution.
  • If the parental contribution is less than -1500, the recognized parental contribution is -1500.
  • For independent students:
  • With dependents other than a spouse: assigned family responsibility is 71% of the student contribution.
  • Without dependents other than a spouse: assigned family responsibility is 35% of the student contribution.
  • If the student contribution is between 0 and -1500, assigned family responsibility is 50% of the student contribution.
  • If the student contribution is less than -1500, the recognized student contribution is -1500.
  • If the student or parental contribution is less than 0, the assigned family responsibility is 0.
  • Part-time students: assigned family responsibility must be prorated based on the ratio of enrolled credits to full-time credits.

• Surplus appropriation and adjustments (Section 2)

  • If the amount appropriated is more than enough to fund projected grant demand in the second year of the biennium, the office may:
  • Increase the living and miscellaneous expense allowance in the second year, up to an amount that still leaves enough to fund projected grant demand, or
  • When calculating assigned family responsibility, recognize a negative parental contribution or student contribution less than -1500 as equal to the lowest student contribution provided under the federal needs analysis.
  • These adjustments may be made one or more times.
  • When there are more than enough funds, the office must balance resources to meet projected grant demand with the goal of fully allocating the state grant appropriation.
  • Any increase in the living and miscellaneous expense allowance or any modified assigned family responsibility does not carry forward into a subsequent biennium.

• Other notes

  • Section 3 is listed but has no content in the provided text.

Significance and Expected Impact

• The bill tightens and standardizes how family contribution is calculated for grant awards, with specific percentage rules and caps for both dependent and independent students.
• It introduces a floor for negative contributions (-1500) and requires that negative values be zeroed out in some cases, which can affect the calculated aid for some students.
• It allows the state to use surplus funds in the second year to either raise living/expense allowances or adjust assigned family responsibility, but any such changes are not kept for future years.
• The changes could alter grant amounts for many students, particularly those near the thresholds or with unusual contribution scenarios, and they provide more flexibility for administrators to manage grant funding when there is excess money.

Potential Scenarios to Consider

• A student or parent with a negative contribution close to -1500 may see adjustments that bring the assigned family responsibility closer to the lowest federal needs amount.
• Part-time students will have their assigned family responsibility prorated, potentially lowering or raising their calculated contribution compared with full-time students.
• In a year with excess funding, the state could increase a student’s cost-of-attendance allowances or modify the calculated family contribution, potentially increasing grant awards temporarily.

Compliance and Administration

• Institutions and the state agency responsible for grants will need to apply the new percentage rules, caps, and prorations when calculating aid.
• Any surplus-related adjustments must be carefully tracked to ensure they do not carry into future bienniums.

Relevant Terms

• assigned family responsibility
• parental contribution
• student contribution
• dependent student
• independent student
• living and miscellaneous expense allowance
• federal needs analysis
• lowest student contribution
• surplus appropriation
• prorate
• cost of attendance
• full-time enrollment
• part-time enrollment
• negative contribution (-1500 cap)