North Star Promise Program in-state residency and work requirement imposition provision, and North Star Promise scholarships limited to students enrolled in programs of study that lead to employment in high-demand industries and occupations provision

A bill for an act

relating to higher education; imposing an in-state residency and work requirement

for recipients of North Star Promise scholarships; limiting North Star Promise

scholarships to students enrolled in programs of study that lead to employment in

high-demand industries and occupations; amending Minnesota Statutes 2024,

section 136A.1465, subdivision 10, by adding subdivisions; Minnesota Statutes

2025 Supplement, section 136A.1465, subdivision 2.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2025 Supplement, section 136A.1465, subdivision 2, is

amended to read:

Subd. 2.

Conditions for eligibility.

A scholarship may be awarded to an eligible student

who:

(1) has completed the Free Application for Federal Student Aid (FAFSA) or the state

aid application by 30 days after the start of the term for which a scholarship is being awarded;

(2) has a family adjusted gross income below $80,000;

(3) is a graduate of a secondary school or its equivalent, or is 17 years of age or over

and has met all requirements for admission as a student to an eligible college or university;

(4) has not completed the degree requirements for the first baccalaureate degree at the

time the scholarship is awarded;

(5) is enrolled in at least one credit per fall, spring, or summer semester;

(6) is enrolled in a program or course of study that
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is eligible under subdivision 2a and

that
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applies to a degree, diploma, or certificate;

(7) is not in default, as defined by the office, of any federal or state student educational

loan;

(8) is not more than 30 days in arrears in court-ordered child support that is collected or

enforced by the public authority responsible for child support enforcement or, if the applicant

is more than 30 days in arrears in court-ordered child support that is collected or enforced

by the public authority responsible for child support enforcement, but is complying with a

written payment agreement under section
518A.69
or order for arrearages;

(9) has not been convicted of or pled nolo contendere or guilty to a crime involving

fraud in obtaining federal Title IV funds within the meaning of Code of Federal Regulations,

subtitle B, chapter VI, part 668, subpart C;
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and
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(10) is meeting satisfactory academic progress as defined in section
136A.101, subdivision

10
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.
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; and
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(11) has signed a contract with the Office of Higher Education to have the applicant's

total scholarship award under this section converted to a student loan if the applicant fails

to fulfill the residency and employment requirement in subdivision 2b.

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Sec. 2.

Minnesota Statutes 2024, section 136A.1465, is amended by adding a subdivision

to read:

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Subd. 2a.

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Eligible programs of study.

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(a) Eligibility for the North Star Promise

scholarship program is limited to students pursuing programs of study in industries and

occupations that are in demand in Minnesota.

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(b) The office shall determine in-demand industries and occupations based on employment

data provided by the Department of Employment and Economic Development. The office

shall review the list of in-demand industries and occupations at least once every three years.

The office may adjust the list as needed to reflect updated employment data from the

Department of Employment and Economic Development.

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(c) The office shall approve programs of study that lead to employment in in-demand

industries and occupations. The office shall review and update the list of approved programs

at least once every three years to ensure alignment with current labor market data.

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Sec. 3.

Minnesota Statutes 2024, section 136A.1465, is amended by adding a subdivision

to read:

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Subd. 2b.

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Minnesota residency and employment requirement.

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(a) To receive a

scholarship under this section, an eligible student must agree to reside and be employed in

Minnesota for a five-year term beginning within six months of completion of the degree or

credential program for which the scholarship was awarded. If a scholarship recipient fails

to meet the residency and employment requirement, the commissioner must convert the

recipient's total scholarship award to a student loan and collect from the recipient the total

amount paid plus interest at a rate established according to section 270C.40.

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(b) The commissioner may waive the residency and employment requirement for a

scholarship recipient if, within six years of the initial scholarship award, the scholarship

recipient:

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(1) has not completed the degree or credential program for which the scholarship was

awarded;

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(2) has not earned a baccalaureate degree; and

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(3) is no longer enrolled in any postsecondary institution.

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(c) The commissioner may defer the residency and employment requirement:

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(1) to allow a scholarship recipient to attend a postgraduate education program, provided

that the recipient is enrolled on at least a half-time basis in that program;

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(2) to perform full-time volunteer service through Peace Corps, AmeriCorps, or a similar

program; or

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(3) for circumstances involving extreme hardship.

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(d) A scholarship recipient who becomes ineligible for a scholarship under this section,

or who has a scholarship terminated under subdivision 6, remains subject to the residency

and employment requirement and must complete the requirement within six years of the

initial scholarship award, unless the recipient qualifies for a waiver or deferment under

paragraph (b) or (c).

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(e) An eligible student who receives scholarship awards for more than one degree or

credential program is only required to meet the residency and employment requirement

once. Any obligation to comply with this subdivision cancels upon the death or permanent

and total disability of the scholarship recipient.

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Sec. 4.

Minnesota Statutes 2024, section 136A.1465, subdivision 10, is amended to read:

Subd. 10.

Report.

The commissioner of higher education shall submit a preliminary

report by September 1, 2025, and an annual report beginning February 15, 2026, to the

chairs and ranking minority members of the legislative committees with jurisdiction over

higher education, on the details of the program, including
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the
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:

(1)
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the
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status of the scholarship fund;
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and
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(2) a list of all currently eligible programs of study under subdivision 2a; and

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(2)
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(3)
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North Star Promise participation data aggregated for each eligible institution to

show the:

(i) number of eligible students who received scholarships in the prior academic year;

(ii) average and total award amounts;

(iii) summary demographic data on award recipients;

(iv) total number of students enrolled in eligible institutions in the prior academic year;

(v) retention rates of participating students;
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and
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(vi) number of eligible students who graduated with a degree and, for each eligible

student, the number of consecutive semesters and nonconsecutive semesters attended prior

to graduation
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.
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; and
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(vii) eligible programs of study under subdivision 2a in which scholarship recipients

were enrolled.

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Sec. 5.
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EFFECTIVE DATE.
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This act is effective the day following final enactment and applies to scholarship awards

beginning in the fall term of the 2027-2028 academic year.

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