NerdWallet’s Guide to Financial Aid Programs in Minnesota

Minnesota has a variety of financial aid options, including grants, scholarships, work-study programs and student loans. In fact, the state awarded $214.4 million in financial aid — not including loans — to students in 2023.

The cost of education in Minnesota

Minnesota has 112 public and private non-profit colleges and universities and has a very average cost of living; it's the 23rd most expensive state in the country.

According to the National Center for Education Statistics, here are the average tuition, fees and room and board costs in the 2022-2023 academic year, the latest available data:

• Public four-year school (in-state): $24,114 per year, almost $2,000 higher than the national average of $22,389. 

• Private, non-profit four-year: $47,839, nearly $2,000 less than the national average of $49,654. 

• Community college (in-state): $6,049, nearly $2,500 higher than the national average of $3,598. (Community college numbers do not include room and board). 

Financial aid options in Minnesota

Minnesota has several financial aid programs, and its public colleges and universities are competitively priced. But to qualify for in-state tuition and most state-based financial aid programs, you must meet the state's residency requirements.

In Minnesota, you are considered a resident if you meet one of the following criteria:

• You graduated from a Minnesota high school while living in the state.

• You received a GED after living in the state for at least 12 months.

• You lived in the state for at least 12 months for non-education purposes prior to enrollment. 

• You are a member of the Armed Forces stationed in Minnesota. 

• You are the spouse or child of a member of the Armed Forces stationed in Minnesota.

• You are the spouse or dependent of a veteran who is a Minnesota resident.

• You immediately relocated to Minnesota within 12 months of a presidential disaster area declaration if the disaster impacted your post-secondary education.

• You are a refugee who immediately settled in Minnesota.

When it comes to undocumented students, including those with Deferred Action for Childhood Arrivals (DACA) status, Minnesota's residency policies aren't as strict as the policies of other states. As a result, undocumented students and DACA recipients in Minnesota are eligible for both in-state tuition and state-based financial aid.

Depending on your circumstances, you may qualify for one or more of Minnesota's financial aid programs:

• 529 plans.

• In-state tuition.

• Grants.

• Scholarships.

• Minnesota work-study. 

• Minnesota student loans. 

• Student loan repayment assistance.

529 plans

Unlike other states, Minnesota doesn't have a prepaid tuition plan. But it does have a 529 college saving plan, MNSAVES, which you can use to save and invest for a child's future education. You can open an account with $25.

With 529 plans like MNSAVES, you can invest your money and it will grow tax-deferred until your child is ready for college. When you withdraw money for eligible education expenses, the withdrawals aren't taxable as income.

Minnesota provides families with another benefit: you can qualify for a state income tax deduction for contributing to a 529. If you're married and file a joint return, you can deduct up to $3,000 per year on your state income tax return.

In-state tuition

Minnesota’s public higher education system consists of 26 colleges and seven universities on 54 campuses throughout the state. As a resident of Minnesota, you can save money on your degree by attending a public school within the state.

Minnesota also participates in tuition reciprocity and exchange programs, which could allow you to attend college in other states at a lower cost.

Reciprocity

Minnesota has reciprocity agreements with select states and regions: Wisconsin, North Dakota, South Dakota and the Canadian province of Manitoba. It also has a limited agreement with Iowa Community College in northwestern Iowa.

Under these agreements, Minnesota residents can attend school in participating areas at a reduced rate. They cover nearly all students, including full-time, part-time, undergraduate, graduate and some enrolled in professional certificate programs.

Midwest Student Exchange Program (MSEP)

MSEP is a tuition network that allows students to attend a public school in a participating state and pay up to 150% of the in-state rate for qualifying programs. If the student attends a private school in a participating state, the tuition is reduced by 10%.

Minnesota residents eligible for reduced tuition through MSEP in the following states:

• Indiana.

• Kansas.

• Missouri.

• Nebraska.

• Ohio.

Minnesota grants

Grants for college are a type of financial aid that are usually awarded based on financial need as determined by the Free Application for Federal Student Aid (FAFSA). Unlike student loans, they don't have to be repaid.

Minnesota provides more grant aid than 33 other states. On average, the state awarded about $1,000 per full-time undergraduate student in 2020-21.

Minnesota offers five grant programs:

Alliss Opportunity Grant Program for Adults Returning to College

Designed to help adults returning to college to earn a first degree, the Alliss Opportunity Grant Program has two options based on financial need:

• Two-Year College Opportunity Grant: Students with financial need attending Minnesota State Colleges and enrolled in two-year programs or certificate courses can qualify for up to $1,100 per year. 

• University Grant: Full-time undergraduate students attending four-year Minnesota State Universities can qualify for a grant of up to $1,100 per year. 

Fostering Independence Higher Education Grant

Minnesota residents who are under the age of 27 and were previously in foster care may be eligible for the Fostering Independence Higher Education Grant. This award is a last-dollar grant, meaning it can cover your remaining costs after deducting your expected family contribution, federal and state aid, foster care Education and Training voucher and other scholarships or grants.

To qualify, you must submit the FAFSA or Minnesota Dream Act application and attend a participating school.

Minnesota State Grant

The Minnesota State Grant is a financial aid program for low- to moderate-income students. Award amounts vary, but the grant is based on the difference between what the student and their family are expected to pay and the actual cost of attendance at their selected college.

In 2018-19, the maximum grant award ranged from about $7,845 at a public two-year college to $12,345 at a private four-year college, and the average award was $2,603.

Minnesota Student Teacher Grants

Students enrolled in teacher preparatory programs may qualify for a Minnesota Student Teacher Grant during the term in which they complete their 12-week student teaching experience. There are two types of awards:

• Minnesota Student Teachers in Shortage Areas Grant. This is awarded to students who intend to teach in rural school districts or license shortage areas.

• Minnesota Underrepresented Student Teacher Grant. This is awarded to students who belong to racial or ethnic groups underrepresented in Minnesota's education workforce. 

Grant recipients can receive up to $7,500 for one term.

Minnesota scholarships

Minnesota has five college scholarship programs. These awards are typically based on merit, though some do take the student's financial need into consideration:

Minnesota Academic Excellence Scholarship

The Minnesota Academic Excellence Scholarship is for high school graduates who enroll in a bachelor's degree program at the University of Minnesota, a Minnesota state university or a private degree-granting school within the state the same year they graduate from high school. Depending on the school, the award can cover up to the full price of tuition and fees for one academic year. It can be renewed for up to three academic years.

To qualify, students must attend a participating school and display achievements and potential in English, creative writing, fine arts, foreign languages, math, science or the social sciences.

Minnesota Aspiring Teachers of Color Scholarship

The Minnesota Aspiring Teachers of Color Scholarship is a pilot program that provides financial aid to eligible undergraduate and graduate students preparing to enter careers as teachers who belong to underrepresented racial or ethnic groups. Qualifying students enrolled in an eligible program can receive up to $10,000 per year, up to a lifetime maximum of $25,000.

Minnesota Indian Scholarship

Students with financial need who are one-fourth or more of American Indian ancestry or who are an enrolled member or citizen of a federally-recognized American Indian tribe or Canadian First Nation may be eligible for the Minnesota Indian Scholarship program. The maximum award is $4,000 per year for undergraduate students and $6,000 per year for graduate students.

With this scholarship, students can get a lifetime maximum of up to 10 annual awards.

Minnesota Paramedic Scholarship

The Minnesota Paramedic Scholarship is a temporary program running from the fall of 2024 until June 30, 2026.

This award is for Minnesota residents attending an eligible paramedic program. The scholarship provides students with up to $5,000 per year for up to two years. Applications are not yet available, but students can expect them to be available after January 1, 2024.

North Star Promise Scholarship

The North Star Promise Scholarship is a new program that will be available in the fall of 2024. It is a last-dollar scholarship for Minnesota residents that covers the student's remaining cost after deducting other scholarships, grants and tuition waivers.

To qualify, students must have a family adjusted gross income (AGI) below $80,000 and attend an eligible public school or tribal institution.

Minnesota Work-Study

Minnesota operates its own work-study program that provides eligible students with part-time jobs to offset the cost of their education. Work-study requirements and awards are set by the college's financial aid office, but students earn an average of $1,903 per year through the program. All Minnesota public universities and most private institutions participate.

Minnesota student loans

If you have to borrow for college, consider federal student loans first. If you still have funding gaps, Minnesota offers a student loan program that might be better for you than other private loans.

SELF Loans

Minnesota's student loan program is known as SELF. Unlike private loans, which typically base interest rates on the borrowers' credit scores or income, SELF gives every student the same rate. Eligible students can borrow between $500 and $40,000 per year (the maximum varies by the student's program of study).

To qualify, you must be enrolled in an eligible institution in Minnesota, or be a Minnesota resident enrolled at an eligible out of state school. You must also have a creditworthy co-signer.

You can apply for a SELF Loan online.

Student loan repayment in Minnesota

Like many states, Minnesota has experienced worker shortages in certain fields. To address this problem, the state operates several loan repayment programs that help professionals repay their loans. In exchange, the borrower must commit to working in high-need areas for a specific period.

There are five loan repayment programs in Minnesota:

John R. Justice Loan Repayment

The John R. Justice Loan Repayment Program is a federal program administered by the Minnesota Office of Higher Education. It provides student loan repayment funding to full-time public defenders and public criminal prosecutors who serve full-time for three years. Award amounts vary based on program funding.

After the initial three-year commitment, eligible attorneys can reapply for more funding if they continue to serve.

Minnesota Rural Veterinarian Loan Repayment Program

The Minnesota Rural Veterinarian Loan Repayment Program is limited to current students and recent graduates of the Doctorate of Veterinary Medicine Program at the College of Veterinary Medicine, University of Minnesota. Eligible borrowers can receive up to $15,000 per year to repay their loans for up to five years, for a maximum of $75,000.

To qualify, participants must commit to working full-time for at least five years as licensed veterinarians in a designated rural area.

Minnesota Aviation Degree Loan Repayment Program

The Minnesota Aviation Degree Loan Repayment Program provides loan repayment benefits to eligible pilots and aircraft technicians living in Minnesota. To qualify, you must have received your degree in Minnesota, have a valid pilot or aircraft technician license and sign a contract agreeing to a five-year, full-time service obligation in the state.

The maximum award is $3,000 per year for aircraft technicians and $5,000 per year for pilots. The award can be renewed for up to five years.

Minnesota Agricultural Education Loan Repayment Program

Teachers who provide agriculture education to grades five through 12 at a Minnesota school may qualify for the Minnesota Agricultural Education Loan Repayment Program. By committing to a five-year service obligation, award recipients could receive up to $3,000 per year in loan repayment benefits, up to a total maximum of $15,000.

Minnesota Teacher Shortage Loan Repayment Program

Licensed teachers who work in designated shortage areas may qualify for loan repayment benefits through the Minnesota Teacher Shortage Loan Repayment Program. Recipients can receive up to $1,000 per year in loan repayment assistance paid directly to them, up to a lifetime maximum of $5,000.

How to apply for financial aid in Minnesota

To apply for Minnesota's financial aid programs, follow these steps:

1. Submit the FAFSA or the Minnesota Dream Act Application. Most of Minnesota's financial aid programs require students to submit the FAFSA. If you're eligible for the FAFSA, you can complete and submit it at FAFSA.gov. Undocumented students who aren't eligible for the FAFSA can still qualify for state-based aid by filling out the Minnesota Dream Act Application. 

2. Review other requirements. Some programs, such as the Minnesota Indian Scholarship, have their own applications. Review the program's website to find out what additional materials you may need to submit. 

Contact your college's financial aid office. Many of Minnesota's financial aid programs are processed through college financial aid offices, so reach out to your school's financial aid department if you have questions or to check your eligibility for certain programs.