State overestimates student grant need by $46 million

Than Tibbetts

The state office responsible for handling grant money overestimated the need for student aid, officials said at a Senate committee meeting Tuesday.

The state’s Higher Education Services Office overestimated by $46 million for its state grant program, officials said.

The surplus occurred because the office overestimated tuition increases and there was a change in the grant program’s income distribution, officials said.

HESO helps Minnesotans gain access to higher education through grants, loans and work-study programs. In 2004, it awarded $115 million in state grants to approximately 70,000 students, according to HESO documents.

Although too much money was allocated for the grant program, officials said it is unlikely students will see that money.

State rules say that if grant money isn’t distributed, it will return to the general fund, HESO officials told the Senate Higher Education Budget Division.

Already, $32 million has been returned to the general fund, said Mark Misukanis, HESO’s director of fiscal policy and research. Legislators could rescue up to $11 million of the surplus, if they pass a bill allowing that money to be distributed to students.

Committee Chairwoman Sen. Sandy Pappas, DFL-St. Paul, said she knew of past problems with grant money returning to the general fund.

“We’re trying to figure out if there’s a way that we can capture that money back,” she said.

Pappas told the committee she was interested in forming a fund or finding some way to keep excess grant money from being returned to the state.

Tricia Grimes, a policy and research analyst for HESO, said the projections could still change because the office has to wait for data from this spring and summer.

In 2003, the state ran out of grant money for its fiscal year. Officials stopped accepting applications for grants midway through the year and didn’t accept any grant applications that summer.

Many students were left without state grant money and had to resort to loans or other means of scholarship.