The North Star Promise Scholarship Program, passed by the Minnesota Legislature in 2023, goes into effect for the fall 2024 semester at all state colleges and universities and our four tribal colleges. The program picks up all residual tuition and fees for students from households with under $80,000 income as calculated on federal student aid applications. It is a “last dollar” program that picks up whatever remains after all other scholarships and grants from whatever other sources are used.
The DFL already is touting the program in its campaign advertising. Public reaction is generally positive. But there are the economic points to be raised.
What are the ins and outs of a program that adds a first-year taxpayer cost of nearly $120 million to a $55 billion budget? The “spillover benefits” of public education are a starting point. Education is a “mixed good” that has benefits not only for the individual “consuming” it, but also for society as a whole. Let’s understand our terms: A hamburger or T-shirt is a private good.
It benefits only the person eating or wearing the product. Tornado warning sirens and aircraft carriers are “public goods;” These benefit large swaths of the population, or the entire nation, as a whole without being tied to any individual. Education has aspects of both.
Pure public goods like tornado warning sirens are “non-rival.” If I hear the warning, it does not “use up” anything. Everyone within earshot can hear it too, whe.
