HF4431

Purpose

• Create the Higher Education Loan Program (HELP) to provide low-interest loans to eligible Minnesota students attending eligible Minnesota postsecondary institutions.

Main provisions

• HELP loans: fixed interest rate not to exceed 3 percent, unless a different fixed rate is established by law.
• Loan limits: up to $5,000 per student per year; total (cumulative) borrowing limited to $20,000 per student.
• Administration: the commissioner may contract with an outside loan servicer to run the program.
• Funding and accounts: a HELP loan account is established in the special revenue fund. Money appropriated to the commissioner for the program goes into this account; principal and interest paid are deposited back into the account; all money in the account (including interest) is available to make loans and appropriations do not cancel and remain available until expended.
• Rulemaking: the commissioner may adopt rules to implement the program.

Eligibility

• Residency: the student must be a Minnesota resident.
• Institution: the student must attend a public or nonprofit postsecondary institution located in Minnesota that is eligible under Minnesota Statutes section 136A.103.
• Income: the student’s household income must be less than or equal to 300 percent of the federal poverty guidelines for the household size.

Administration and servicing

• The program is administered by the Commissioner of the Office of Higher Education.
• The commissioner may contract with an outside loan servicer to implement the program.

Funding and appropriations

• General fund appropriations: $17.5 million in fiscal year 2026 and $17.5 million in fiscal year 2027 to deposit into the HELP loan account; up to 3% of these funds may be used for administrative costs.
• Onetime appropriation: a onetime appropriation to secure a loan service for the HELP program (to be used by the Office of Higher Education).

Rulemaking

• The commissioner is authorized to adopt rules necessary to implement the HELP program.

Significance / What this changes

• Creates a new state-backed, low-interest student loan program (HELP) with specific eligibility and borrowing limits.
• Establishes a dedicated funding mechanism (special revenue fund) and a separate administrative framework (Office of Higher Education) to operate the program.
• Adds potential involvement of a third-party loan servicer and sets up rulemaking authority to implement details.

Relevant Terms - Higher Education Loan Program (HELP) - low-interest loans - fixed interest rate - 3 percent - maximums: $5,000 per year, $20,000 cumulative - Minnesota resident - eligible Minnesota postsecondary institution - public or nonprofit institution - 136A.103 (eligible institutions) - household income - 300 percent of federal poverty guidelines - special revenue fund - general fund - Office of Higher Education - commissioner - loan servicer - rulemaking - appropriations - administration costs - onetime appropriation