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U of M aims to get more tuition aid to middle-class families

MINNEAPOLIS - At the University of Minnesota, officials say, it’s middle-class students who bear the heaviest burden when it comes to paying for their education.

Low-income students get plenty of help from federal, state and university grants, vice provost Bob McMaster said. For a family making less than $30,000, for example, total grant aid this year exceeded the cost of Twin Cities tuition and fees by $1,553.

Students from wealthy families, meanwhile, earn an outsize share of merit-based financial aid for their high grades and test scores and academic awards.

But middle-class families don’t get much help.

“These are the students who were taking out the most significant loans to stay in school,” McMaster said in an interview. “It was that vulnerable middle where we got very concerned from the data we looked at, as well as the stories from these students.”

The U has been taking steps to change that, using both university and private funds.

Recently, the Board of Regents passed a budget that raises the income ceiling on its main need-based program, the Promise Scholarship.

Established in fall 2005, it originally made tuition free to any Minnesota resident who qualified for the Pell Grant, the federal government’s main program for low-income college students. Six years later, the U began to help families making up to $100,000 and reduced the per-student benefit.

This fall, the income limit will be $120,000 — about twice the state’s median family income and more than what 82 percent of U.S. families make.

The $306 per-student award for those families, enough to offset the 2.5 percent Twin Cities tuition increase, will cost the university $835,000 next school year.

The regents pushed for the new scholarship tier, but McMaster said President Eric Kaler’s administration was “fully on board.”

“As we see more and more financial stress in higher education, it made sense to put some additional resources in there to extend it to $120,000,” he said.

Richard Pfutzenreuter, the university’s retiring chief financial officer, said the change is partly a recognition that college can be expensive, especially for middle-income students who don’t qualify for government aid.

“Not all kids get support from their parents,” he said.

About 70 percent of Minnesota’s four-year college graduates in 2014 left school with student loans, according to the Project on Student Debt. The average total was $31,579, fifth highest in the nation.

Privately-funded scholarships

The U also has established three large, privately funded scholarships that target middle-class families, following the lead of David M. Larson, the deceased regent and Cargill executive who wanted to free students from worrying about college debt.

Created with an initial gift of $5 million, the Larson Scholarship provides 200 Minnesota residents with $5,000 to $6,000 each year to attend the U.

McMaster said Larson Scholars have to be “hustlers” with leadership potential, but outstanding academic records are not required. Their parents must make less than $100,000 but more than $50,000.

The Larson recipients often say that “without this scholarship, in no way I would have been able to come to the University of Minnesota,” McMaster said.

The university since has added the Buuck and Olseth family scholarships, which provide similar aid packages for middle-income families.

Between the Larson, Buuck and Olseth scholarships and Promise grants to families making more than $50,000, the university awarded about $7 million this year in need-based aid to middle-class families.

Joining need- and merit-based grants to the middle class have become almost a third category of financial aid for the U, McMaster said.

“That’s a category that I personally would like to see grow significantly,” he said.

Other colleges

Relative to some of the nation’s elite schools with huge financial endowments, the U’s aid for middle-class families is paltry. Princeton University awards free tuition for families making up to $140,000 and Stanford University, up to $125,000.

Even some Twin Cities community colleges can afford, in combination with federal and state grants, to offer free tuition to middle-class students.

Traditional students right out of high school can go free to St. Paul College if their family has less than $70,000 annual income; Minneapolis Community and Technical College does the same for families earning up to $75,000.

But when both colleges looked to expand their financial aid programs, they looked at ways to serve more low-income students rather than simply increasing the income cap.

St. Paul College is piloting the Make it Count scholarship, offering free tuition for students 24 and older under the same income limits. And a scholarship drive last year for the school’s 105th anniversary was aimed at low-income and first-generation students.

Rassoul Dastmozd, St. Paul College president, said he’s not interested in subsidizing college for higher-income students at the expense of the truly needy.

“If you’re an open access institution, you shouldn’t do anything to harm access,” he said.

Coming off a fundraising campaign, MCTC recently decided to expand its free-tuition program beyond traditional high school. Now, they’ll provide free tuition for undocumented persons, students facing homelessness and other adults who live in the city’s north side or Cedar-Riverside neighborhoods and make less than $75,000 a year.

Mike Christenson, MCTC associate vice president of strategic partnerships and advancement, said the college has strong support from business people who want to help those with the greatest needs.

“Our funders prefer to fund programs for those that otherwise would not be able to go to school,” he said.

The private University of St. Thomas has no income ceiling but makes need-based awards according to the federal government’s “expected family contribution” calculation on the Free Application for Federal Student Aid (FAFSA).

Kris Roach, executive director of admissions and financial aid, said St. Thomas donors often specify that their gifts benefit low-income students. But she sympathizes with middle-class families dealing with the high cost of college.

“We see people with multiple children and multiple children in college, and that can create a pretty healthy need for people,” she said.