Minnesota lawmakers have reached a higher education funding deal that would increase support to public colleges and universities by nearly $100 million over the next two years, establish an automatic college acceptance program for state high school seniors and create new grants for students who were raised in foster care.

State spending on higher education would total $3.5 billion over the next two years through the compromise, which was announced this week ahead of a special legislative session that is expected to start Monday. Lawmakers must pass a $52 billion state budget before July 1 to avoid a government shutdown; Gov. Tim Walz and legislative leaders reached a broad deal in May but are still piecing together spending details.

The higher education package is one of the first to emerge. The Minnesota State system of 30 community colleges and seven universities would receive a $56 million increase to its two-year appropriation. The University of Minnesota would get a $38 million funding bump for its five campuses.

"Minnesota State and the University of Minnesota, as I understand, feel that they can do well for their students with the funding that we got them," said state Rep. Connie Bernardy, DFL-New Brighton, chairwoman of the House higher education committee. "We did a good job helping students in the state."

Minnesota State would not be required to freeze or cut tuition in the next two academic years, as previous House and Senate higher education funding proposals had mandated. Instead, the compromise allows the system to hike undergraduate tuition by as much as 3.5% per year.

Mike Dean, executive director of the community college student association LeadMN, was disappointed by the change. He argued that Minnesota State could have afforded a tuition freeze, citing the proposed state funding boost and the hundreds of millions of dollars the system received in federal COVID-19 relief funding.

"The legislators said they weren't going to balance the budget on the backs of students, but that's exactly what they did," Dean said.

Lawmakers agreed to allocate $1 million to create a proactive college admissions program. Minnesota high school seniors who meet academic benchmarks would receive letters showing they have been accepted into a set of institutions in the Minnesota State system without having to apply. The program is meant to simplify the admissions process and increase access for underrepresented students who may not consider college.

Also included in the higher education package is about $4 million to create a "fostering independence" grant program for students who were raised in foster care. Qualifying students could receive grants to cover their college costs for up to five years. The grants would cover any leftover college costs that are not covered by scholarships and traditional state and federal aid.

Lawmakers also would require Minnesota State to implement mental health awareness programs, including online resources and employee training, at each of its colleges and universities by fall 2022.

"One of the biggest things we heard about was [student] mental health needs," said Sen. David Tomassoni, I-Chisholm, chairman of the Senate Higher Education Finance and Policy Committee.

Separate from the higher education package, a "bill of rights" to protect student loan borrowers has been included in the state commerce bill, said state Rep. Zack Stephenson, DFL-Coon Rapids. The bill would require student loan servicers operating here to be licensed by the Department of Commerce. And it would give the state commerce commissioner power to suspend or revoke the licenses of servicers that mislead borrowers.

Staff writer Jessie Van Berkel contributed to this story.

Ryan Faircloth • 612-673-4234