Higher ed bill helps students

I first started at the Bemidji (Minn.) Pioneer as an intern in the summer of 1996. That would begin six years as a news reporter, sports reporter and copy editor for a small, six-day-per-week daily newspaper in northern Minnesota. I wrote a large range of stories from multiple beats, to features to sports, my favorite being the coverage of the Red Lake Reservation High School basketball team named the Warriors. Here is a collection of my stories from my time at the Pioneer.

July 17, 1997

By Devlyn Brooks

Staff Writer

Good news for students trying to pay for a college education: Starting this year the state will pump significantly more money into financial aid programs approved in the 1997 higher education bill, the Minnesota Higher Education Services Office announced last week.

And the increases in certain programs -- like state grants awarded to students -- have already benefitted Bemidji State University, according to BSU's Associate Director of Financial Aid Paul Lindseth.

For example, students attending BSU during this summer's two school sessions were grandfathered into the new funding allocations, resulting in larger-than-usual financial allocations during this year's summer sessions I and II.

Previously, students receiving the federal Pell Grant were cut off from financial aid during the summer sessions, Lindseth said. But under the new state legislation, those students will be receiving larger state grants to supplement those lost dollars.

"Because of the bill that was passed, we went back and reprocessed financial aid awards for those attending school this summer," he said. "Some students went from $200 (in state aid) to $1,000. What it did was help most students get by without a loan for summer. That was a big, immediate impact."

Another boon to BSU students: The state also hiked child care dollars given to students who are not on Aid to Families with Dependent Children.

Lindseth said those two changes generally will have the greatest effect on public higher education institutions, but other changes were also made to the state's financial aid program.

Overall, the Legislature approved $233 million in state grant and work-study programs for the biennium that began July 1, and it also adopted three new initiatives to encourage families to save for their children's education, according to a news release.

Almost $93.4 million dollars in state grant dollars was approved for the fiscal year 1998 and almost $110 million was guaranteed for fiscal year 2000.

The amount allocated for fiscal year 1988 was a decrease from the prior year, but Lindseth said he suspects that was because there was an increase in the federal Pell Grant for that fiscal year.

Almost $19 million, to be split evenly over the biennium, was approved for state work-study students, and five other grants over the course of the two years will total more than $5.5 million.

The other major modifications to the state's financial aid plan was the creation of three new savings incentives.

First, effective July 1 next year, the state will protect an additional $25,000 in net worth in the federal need analysis used to determine state grant eligibility. Meaning, Lindseth said, that families will be allowed to have an extra $25,000 in assets that will not count against their ability to receive aid.

The second program, EdVest, will allow individuals to contribute to a state managed savings account, under which any investment earnings are exempt from federal and state taxes. However, the beneficiary of the savings plan will be taxed when withdrawing the funds.

Another feature of EdVest is the state would provide matching grants to the individual investing money in the account up to $300 annually. Families with incomes under $50,000 could receive a 15 percent match, and those with incomes between $50,000 and $80,000 could receive a 5 percent match, according to the release.

The final savings incentive is the Gopher State Bond program, in which the state will market federal and state tax-exempt bonds to help families save for college. The first $25,000 worth of these bonds will be exempt from consideration in determining eligibility for Minnesota State Grants.

"The savings initiatives are directly focused toward the middle classes," Lindseth said. "The middle classes have traditionally not received much financial aid. (These) savings initiatives are a move at the state, as well as the federal, level to create a desire to save for education."