Minnesota residents who enroll as freshmen at the University of Minnesota’s regional campuses, including Duluth, could be eligible for more scholarships under a proposed program. (Alex Kormann, Star Tribune/The Minnesota Star Tribune)

Minnesota residents who enroll at the University of Minnesota's regional campuses would receive several thousand dollars more in scholarship aid if state lawmakers fund a newly proposed program.

The U has asked the Legislature for $30 million to create a new Greater Minnesota Scholarship Program for resident students who enroll as freshmen at its Duluth, Rochester, Crookston and Morris campuses. The program would give every resident student $4,000 to $5,000 in their first year and $1,000 to $2,000 in each of their next three years. University leaders say the program would lower the average student debt for graduates by a significant amount and help boost enrollment.

"Minnesota is a net exporter of high school students, especially to our surrounding states," Bob McMaster, the U's vice provost and dean of undergraduate education, told the Board of Regents this month. "Such a generous scholarship program would likely retain more students within the state and within the University of Minnesota system."

The flagship Twin Cities campus is not included in the scholarship program because it already gives out more scholarships than the outstate campuses, administrators said.

Tuition at the four outstate campuses ranges from $12,500 to nearly $14,000 per year.

Students who graduated with bachelor's degrees from the Rochester and Morris campuses in 2020 averaged just under $25,000 in loan debt, according to data provided by the U, while graduates from Crookston and Duluth had about $27,000 and $32,000, respectively.

The proposed scholarship program would effectively lower the average debt for Minnesotans attending those campuses by $7,000 to $11,000. The exact scholarship amounts are still to be determined, a U spokesman said, but every eligible student would receive the same amount.

"That by itself starts to get the overall debt load to a much more manageable level for students," said Jeffrey Ratliff-Crain, vice chancellor for academic affairs and innovation at the U's Rochester campus.

University leaders are optimistic about the program's funding chances since the state has a record $9 billion budget surplus. Gov. Tim Walz included funding for the scholarship program in his proposed supplemental budget. House Democrats and Senate Republicans have both expressed general support for lowering college costs.

Administrators estimate 8,500 to 9,500 students would benefit from the scholarship program annually. McMaster told regents the program could increase enrollment by 2,000 students across the four campuses.

"This would be a major recruitment device for these campuses to have," McMaster said.

The U's outstate campuses do not have enough philanthropic resources to offer many scholarships, Ratliff-Crain said, making them less competitive with public and private colleges here and in neighboring states that offer more financial aid.

Between fall 2011-2021, enrollment decreased 33% at the Morris campus, 16% at Duluth and 13% at Crookston, according to university data. The Rochester campus grew from 273 students to 646 during that time.

Families interested in the University of Minnesota Duluth have increasingly voiced concern about the cost, said Mary Keenan, the Duluth campus' associate vice chancellor for enrollment management. She believes the scholarship program will make the Duluth campus a more attractive destination for Minnesota students.

"We know that UMD is the right choice for many students," Keenan said. "We don't want students discounting attending their [preferred] University of Minnesota campus because of the cost."

The U is separately asking the Legislature for another $30 million to expand its Promise Scholarship program. State residents at all five campuses are eligible for that scholarship, and 13,000 to 14,000 Minnesota families benefit from it annually, according to the university.

The proposed expansion would increase the program's family income limit from $120,000 to $160,000, supporting more students from middle-class families, who are most likely to graduate with higher loan debt. Promise Scholarship awards would increase by $1,100 to $2,000 per year with the legislative funding, administrators say.

"Attentiveness to our middle-income students needs to be a priority for our financial aid strategies moving forward," McMaster said.