North Dakota higher ed leaders look for ways to match Minnesota’s free tuition program

DICKINSON, N.D. — Higher education leaders and university presidents are laying out reasons why North Dakota lawmakers should respond to the Minnesota program offering income-based free tuition to thousands of students.

One state senator is also offering a draft proposal of a plan that he said could help institutions hurt by the Minnesota program and boost North Dakota’s workforce at the same time.

Stakeholders spoke at the meeting of the interim legislative higher education committee in Dickinson on Wednesday, Aug. 2.

They’re hoping for a plan to blunt the effect of the North Star Promise program that they fear will lure Minnesota students already enrolled in North Dakota colleges and universities and those planning to attend North Dakota schools in the future.

The North Star Promise program will provide free tuition to students from Minnesota families with annual incomes of less than $80,000, with applications starting in fall of 2024.

Some fear the effects could even be felt as soon as this fall, as students make future plans.

Schools on the eastern side of the state, closest to Minnesota, are expected to feel the biggest impacts of North Star Promise, including North Dakota State University in Fargo, University of North Dakota in Grand Forks, Mayville State University, Valley City State University and North Dakota State College of Science in Wahpeton.

Data indicates North Dakota State University is the top out-of-state institution for all first-year Minnesota college students.

In the fall of 2020, they made up 52% of the first-year class at NDSU, said Laura Oster-Aaland, NDSU vice provost for student affairs and enrollment management.

If half of qualifying students chose to stay in Minnesota for free tuition, NDSU could lose 365 students a year at a cost of about $6.5 million in tuition and fees alone, she said.

NDSU President Dave Cook told the committee the colleges and universities are hoping to get help.

“We’re hoping to work with you to solve a pretty difficult situation,” he said.

VCSU President Alan LaFave said while the impact of Minnesota’s free tuition might be lesser on his campus, more than 60 VCSU students from Minnesota could meet the income threshold for North Star Promise.

If half of them chose to leave, VCSU would incur a nearly $700,000 annual loss, he said.

LaFave said there could also be negative consequences to North Dakota’s workforce as a result.

Of the Minnesota students who graduate from VCSU, about 40% choose to stay in North Dakota afterward to work. Of those, 75% take teaching jobs in North Dakota, LaFave said.

UND President Andrew Armacost said when looking at enrollment trends, it’s clear this is a long term issue.

“We need to position ourselves smartly not just by reacting to what we’re seeing across the border, but anticipating what the challenges will be across a long period of time,” Armacost said.

Democratic Sen. Tim Mathern, of Fargo, said he drafted a bill for a proposed Dakota Promise plan, a forgivable student loan program that would cost $17 million and could be considered in the next legislative session.

“If we wanted to have a special session or some other issues came up, we could start this earlier,” Mathern said.

The program would have the same $80,000 family income threshold as Minnesota’s plan and would cover tuition and fees left after state and federal grants and institutional scholarships were applied.

The tuition benefit would come in the form of a loan issued by the Bank of North Dakota, Mathern said, and would be forgiven if the graduate chooses to stay and work in the state.

For example, 20% would be forgiven for each year of employment, with the loan obligation eliminated after five years of employment in North Dakota.

Another feature of the draft bill is an income tax reduction for businesses that choose to pay tuition for their employees attending a North Dakota college or university.

“The goal is not only to educate students, but to retain them to address the workforce needs we have in North Dakota,” Mathern said.

The interim legislative higher education committee took no formal action.

North Dakota is one of four states in which the legislature meets biennially in odd-numbered years.

Barring a special session, lawmakers will next convene in January 2025.