ST. PAUL - College students facing rising tuition when they head to campus next fall have at least some good financial news - state and federal governments are increasing grant programs.
Up to 9,000 more Minnesota students from low- and middle-income families may receive grants and many of the 83,000 existing grant recipients could get more money.
"Given what has happened to family financial circumstances over the past year, this couldn't have come at a better time," said David Laird Jr., president of the Minnesota Private College Council.
It is one of the rare areas of more government spending during a recession.
However, uncertainty remains over the grants and state institutions still could face deep budget cuts as Gov. Tim Pawlenty balances the state budget by cutting nearly $3 billion in the coming weeks. The Republican governor has been a strong supporter of the student grant program, but college leaders are practical.
"Who knows where he will have to turn when he gets down to those last few million," Laird said.
"That is the wildcard," added Michael Uran, St. Cloud State University financial aid director.
The governor has said he likely will cut state-run college and university budgets by July 1.
President Barack Obama and Congress injected $15.6 billion of new funds into the Pell Grant program nationwide. Federal changes and a new law from Pawlenty and the Minnesota Legislature added $70 million to the state's college student grant program over two years, which spent $149 million last year.
"The cumulative of the two going up is a powerful message," said Eric Berg, enrollment management vice president for the College of St. Scholastica in Duluth.
The federal and state grants go to students whose families otherwise may not be able to afford sending them to college. Most students' families earn less than $40,000 a year, and the practical uppermost limit is $70,000 income.
The top Pell grant in the 2007-08 school year was $4,310. Congress upped that to $5,350 beginning next fall. The average Minnesota grant is expected to rise 17 percent, to $1,712.
Since the Minnesota grant program is tied to the Pell plan, the federal increase freed up state grant money for more students, Uran said. The Legislature also voted to allow students receive grants for nine semesters instead of just eight.
Many students from low- and moderate-income families will benefit from the grant influx, but it will mean more for some, according to Karen Lee of Concordia College financial aid office.
"It will help them come back when they otherwise could not," the Moorhead college administrator said.
In general, most students already have committed to a college and the added money just will reduce loans they need to take out. However, Berg said, it may mean students will shop around more before committing to a college in the fall of 2010.
The federal and state decisions "make it possible for students to chose what type of instruction is better for them," said Laird, whose private colleges often lobby for student grant increases while state-run institutions often prefer state money to flow directly to state schools.
Uran said the change he could see in 2010 is more students attending college.
"It allows students who previously felt they could not afford to go to college to take another look at that," Uran said.
Still, he said, "I don't think there will be a significant surge."
Most Minnesotans do not know about the increased grant money, so Berg said colleges need to tell students.
"The college's responsibility in the next month or so is to communicate as fully as possible what this means, and to whom," Berg said.
College leaders say it is important to help students in need.
"With today's economic hardships, expanding Minnesota's need-based aid was more important than ever," said Pam Jolicoeur, president of Concordia College and board chairwoman of the Minnesota Private College Council.