Higher ed omnibus bill gains division approval

Argosy changed everything. At least in terms of this session’s higher education legislation, the closure of that private, for-profit university inspired a fresh focus.

When, in spring of 2019, Argosy University suddenly closed – including its Eagan campus and all of its academic programs – students left school-less scrambled to finish their studies elsewhere, with help from the Office of Higher Education. But it became clear to many that there were limits to how much the state could do to guard against such situations in the future.

That’s expected to change under the omnibus bill approved by the House Higher Education Finance and Policy Division Tuesday afternoon.

The division chair, Rep. Connie Bernardy (DFL-New Brighton), is the sponsor of HF3392, which was replaced by a delete-all amendment. It would give the Office of Higher Education a stronger punitive presence by allowing the state agency to revoke, suspend or refuse to renew a school’s registration of licensure, or its participation in state financial aid programs.

It would also require postsecondary institutions to provide more financial data to the state and place new restrictions on schools at risk of closure, including not allowing them to enroll more students or collect tuition.

The bill would also make several changes to the Minnesota college savings program to account for changes in federal law.

HF3392 was approved by the division on a 10-7 party line vote, and is on its way to the House Ways and Means Committee. Its companion, SF3683, sponsored by Sen. Paul Anderson (R-Plymouth), awaits action by Senate Higher Education Finance and Policy Committee.

The Office of Higher Education would have several other new responsibilities under the bill, including:

• collaborating with the Department of Education on evaluating concurrent enrollment programs, through which high school students attend college classes;
• consulting with a newly formed Tribal Nations Education Committee;
• setting an annual goal for the percentage of Minnesota high school seniors completing the Free Application for Federal Student Aid (or FAFSA);
• expanding eligibility for the office’s Child Care Grant program; and
• establishing loan limits for the state’s student loan program.

The bill would also exempt certain religious organizations from office oversight, make changes to the Large Animal Veterinarian Loan Forgiveness Program and the state reciprocity program, and assign the Professional Educator Licensing and Standards Board the responsibility to define teacher shortage areas.

As for the state’s 529 college savings plan, the bill would conform state law to changes in federal law that permit:

• qualified distributions for up to $10,000 of K-12 tuition expenses;
• apprenticeship program expenses; and
• student loan payments for the beneficiary or the beneficiary’s sibling.

Rollovers would also be permitted to Achieving a Better Life Experience accounts.

A fiscal note estimates the bill would cost the state’s General Fund $110,000 in fiscal year 2021 and $220,000 in fiscal year 2023.

Some Republicans expressed concern that grew from the testimony of Paul Cerkvenik, president of the Minnesota Private College Council. Cerkvenik said the bill’s school closure provisions, which were inspired by the Argosy situation, have been reframed by the economic downturn caused by COVID-19 and could prove costly to private colleges.

“This bill proposes a very significant increase in the surety bond that schools must file,” Cerkvenik said. “What used to be a cost in the range of $250,000 would now, for such institutions as Augsburg or St. Catherine’s, be more in the $4 million to $8 million range. For one of our largest institutions, St. Thomas, it would be closer to $18 million.

“We do not have the financial conflicts that exist in for-profit institutions. When nonprofits do close, they wind down and protect the students. There is little risk of the financial loss encountered in the Argosy situation.”

Betsy Talbot, the Office of Higher Education’s manager of institutional licensing and registration, addressed the surety bond issue.

“We won’t require this of all schools,” she said. “Most of our schools are not going to see this surety requirement. Only when we see a high risk. We recognize that there is an increased cost, but most institutions would not need to meet those requirements.”

What’s in the bill?

The House higher education omnibus bill’s provisions come from two bills related to the responsibilities of the Office of Higher Education:

• HF3392 (Bernardy)
• HF4553 (Bernardy)

Career and technical teacher pilot project approved

The division also approved HF3232, a bill sponsored by Rep. Gene Pelowski, Jr. (DFL-Winona) that would appropriate $400,000 in fiscal year 2020 for a career and technical educator pilot project geared toward creating a pipeline of new teachers. The program would be administered through Winona State University and Minnesota State College Southeast.