Minnesota districts face unexpected financial hit

By: | February 23, 2021

Pioneered by the state of Minnesota in 1985, the Post-Secondary Enrollment Options (PSEO) program lets certain high school students take free classes at public and private colleges throughout the state. Originally intended to give rural students access to a wider range of classes, the program has grown increasingly popular in the last few years, with 10,500 high schoolers participating in 2018-19. Now, with COVID ushering in a widespread adoption of online learning, enrollment has spiked.

While that’s good news for students, it can be bad news for districts, which lose funding for each college class a student takes. Layering these losses on top of pandemic costs, an increase in homeschooling and other trends means school districts are facing unprecedented shortfalls and budget cuts.

Bemidji Area Schools, for example, is down $5 million from its $70 million budget. Rural Menahga Schools, about 175 miles northwest of Minneapolis, took a $2 million hit on a $12 million annual budget. Superintendent Kevin Wellen typically figures on up to $200,000 a year for PSEO costs; this year, he lost that much in the first semester alone.

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