This bill modifies how state grants for higher education in Minnesota are calculated and caps tuition and fees for certain students. Specifically, it sets the allowed tuition and fees as the lesser of the average cost at the institution or a set maximum. If no maximum is set, then the cap for two-year programs is the highest tuition at a public two-year college and, for four-year programs, it's the highest tuition at a public state university.

The bill also adjusts allowances for living expenses to 115% of the federal poverty guidelines if no specific law sets this rate.

The formula for part-time students adjusts costs to the proportion of credits they take compared to full-time students. For incarcerated students, only tuition and fees are considered, excluding any living or miscellaneous expenses.

Lastly, the bill defines fees to include only mandatory fees for full-time resident students, excluding costs for equipment students keep after the course and avoiding optional or punitive fees.