On July 24, 2025, significant changes were made to Minnesota’s financial aid landscape, capturing the attention of students and families alike. Lawmakers not only addressed a substantial $239 million deficit in the state’s primary financial aid grant program but also managed to secure an additional $44.5 million in funding for the upcoming two years. However, these adjustments came with a revised funding formula, which may lead to some students receiving reduced financial support for their college education.
The Minnesota State Grant program is designed to assist middle- and low-income students attending in-state technical schools, colleges, or universities with their educational expenses, including tuition and housing costs. While not every student will experience a decrease in their financial aid this year, many are anxiously awaiting the impact of the new formula on their individual awards.
Financial aid amounts are determined based on family size and income, with grant values for the 2025–26 academic year projected to range from $100 to $17,717. Last year, average grant awards were reduced by amounts ranging from $175 to $730 to address a previous $40 million deficit in the program.
According to recent reports, the modifications to the funding formula include several key changes:
- Eligibility for the grant is now limited to four years of full-time attendance, a reduction from the previous six-year limit.
- Dependent students will face an increased financial responsibility for their overall college costs.
- The application deadline has been moved to an earlier date.
- Students will receive lower amounts for living and miscellaneous expenses, including room, board, and transportation.
- The maximum award for tuition and fees has been adjusted to align with the rates at the University of Minnesota’s Twin Cities campus, with a 2% reduction applied for each of the next two years, regardless of tuition increases. For students attending less expensive institutions, the average tuition and fees at their school will be awarded.
State Senator Zach Duckworth, a Republican, acknowledged that while some of the changes may be temporary, the overall increase in funding for the State Grant program is a positive outcome. He stated, “I don’t think anybody was entirely happy with the end results, but the fact that we were able to increase some funding for students and families was a good thing.”
These changes come at a time when Congress is also considering proposals that could impact federal programs supporting college students, including potential cuts to TRIO and federal work-study initiatives.
As the landscape of financial aid continues to evolve, it is crucial for students and families to stay informed about these developments and how they may affect their educational journeys.