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Financing Minnesota’s Postsecondary
Enrollment Options Program
Jennifer Zinth
Zinth Consulting, LLC
August 2022
Introduction
Minnesota’s Postsecondary Enrollment Options program (PSEO) allows high school students to
travel to the college campus to take college courses at no tuition cost to themselves for both
high school and college credit. The passage of the Postsecondary Enrollment Options
legislation in 1985 marked Minnesota as the first state in the nation to adopt statewide policy
governing dual enrollment programs.
PSEO as the first program of its kind across the country is a source of great pride for some
Minnesotans. However, some state and local stakeholders have expressed dissatisfaction with
the standard PSEO funding model. At the time PSEO was enacted, college courses for high
school students were seen as a means to provide academic opportunities to a small number of
“high-flyer” students whose high schools could not meet their needs for advanced coursework
opportunities. As some interviewed for this project noted, PSEO was originally designed to fill
empty seats in college courses already being offered, and as such, was a win-win for both high
schools unable to meet the needs of these advanced students, and postsecondary institutions
interested in filling these courses closer to capacity. However, the original PSEO funding model
yoked to participation among a small number of “high-flyer” students is a mismatch for today’s
conceptualization of dual enrollment serving a larger number of students with a wider range of
academic preparation and interests – in both general education courses and career/technical
education (CTE).
In recent years, speculation has arisen that this dissatisfaction with the original PSEO funding
model, particularly among K-12 partners, is leading to an increase in the number of PSEO
partnerships operating under the PSEO by contract model. The Minnesota State System
annually collects data on PSEO participation, including via PSEO by contract, that is not
included in the Rigorous Course Taking report. These data suggest that participation in PSEO
by contract is on the rise among Minnesota State institutions. However, these data do not reflect
participation in PSEO by contract through University of Minnesota campuses or private
institutions.
A lack of comprehensive, public-facing data on student participation in PSEO by contract has
led to a perception among some that no PSEO by contract participation data is collected. A lack
of comprehensive, public-facing data has also raised concerns in some corners that PSEO by
contract creates the potential for inequitable student access and participation, as well as the
inability to document the extent of such potential inequities.
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Development of this report
The intended audience for this report includes Minnesota state leaders across role groups; state
agency staff administering PSEO; local K-12 and institution-level board members and K-12 and
postsecondary staff who administer PSEO programs.
The purpose of this report is to provide perspectives from a variety of state and local PSEO
stakeholders on the current PSEO funding model and identify potential alternatives to the
current PSEO funding model — including the PSEO transportation reimbursement — to
increase equitable student participation in PSEO.
The findings of this report were informed by 16 remote interviews conducted in September and
October 2021 with 18 secondary and postsecondary PSEO stakeholders from across Minnesota
representing state agencies (Minnesota State, the Minnesota Office of Higher Education, the
Minnesota Department of Education); state organizations (including professional membership
organizations); local organizations; and Education Strategy Group, which was engaged in
PSEO activities in Minnesota in 2020-2021. Interviewees (referred to as “stakeholders”
throughout the rest of this report) were asked to share their perspectives on advocates for the
current funding model, challenges presented by the current funding model, and alternatives to
the PSEO funding model recently proposed by state leaders. Stakeholders were also provided
with a short overview of dual enrollment funding models in Idaho, Indiana, and Iowa – states
with high school students enrolling by and large in a single dual enrollment model and with high
percentages of students graduating with college credit. Stakeholders were invited to share their
perspectives on the extent to which these models would be a “fit” in Minnesota from a political
and financial perspective.
PSEO Legislation
The PSEO funding model codified in M.S.A. § 124D.09, Subdivision 13, has not changed
appreciably since the 1980s. Under this model, the state pays tuition only for courses completed
for both high school and college credit (the funding model does not cover courses taken
exclusively for postsecondary credit). Per the model, the department of education pays tuition to
the partnering institution. Districts receive a reduced amount of state aid for each student
participating in PSEO based on the percentage of the school day the student is enrolled in
courses at the high school (in other words, high school students must forego at least one
period/high school class in order to access PSEO). Postsecondary institutions are reimbursed
for PSEO tuition at a flat rate set at the state level, regardless of the tuition amount charged to
regularly matriculated students. For PSEO students enrolled full-time in postsecondary
coursework, districts retain 12% of average daily membership (ADM) to cover administrative
costs associated with the student's enrollment. The number of PSEO students enrolled under
this funding model is reported in the department of education’s statutorily mandated Rigorous
Course Taking report, alongside enrollments in concurrent enrollment, Advanced Placement,
and International Baccalaureate courses.
Subdivision 10 and Subdivision 16 of the statute also permit districts and postsecondary
institutions to enter into agreements to offer college courses to high school students under
alternative funding arrangements, a model that refers both to PSEO by contract and concurrent
enrollment. Under the provisions of “Courses according to agreements,” added to the
Postsecondary Enrollment Options Act in 1992, the funding model in M.S.A. § 124D.09
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Subdivision 13 is not used. Instead, the amount of tuition the district pays the postsecondary
partner is locally determined, and each participating high school student is counted in the
district’s ADM as if the student were enrolled in a secondary course. Since funding for PSEO
students enrolled under this model does not flow through the department of education, PSEO
courses taken by students enrolled through PSEO by contract are not reflected in the Rigorous
Course Taking report.
Current PSEO funding formula impact on districts
As mentioned above, districts lose significant amounts of ADM for PSEO students. Some
stakeholders commented on the perception that money is “left on the table” after district state
aid goes to the partnering institution. One stakeholder commented that providing districts with
12% of ADM for full-time PSEO students fails to recognize that even for such students, the high
school counselor and other district staff must commit substantial time on those students’ behalf;
an equitable funding model would recognize that both the K-12 partner and the postsecondary
partner are doing meaningful work to support the student’s participation and success.
Multiple stakeholders commented that rural districts are particularly negatively impacted by the
PSEO funding formula. Because of the time required for rural students to travel from their
community to the nearest postsecondary institution, the only logical way for rural students to
participate in PSEO is to be enrolled at least half-day, if not full-day on the college campus.
Stakeholders also noted that the loss of ADM particularly impacts rural districts with declining
enrollment, in that it negatively impacts economies of scale in staffing teachers and non-
instructional services, as well as the breadth of advanced courses high schools can fill with the
students who stay onsite.
Due to the combination of travel time to postsecondary institutions and the loss of ADM,
stakeholders perceived concurrent enrollment to be the primary source of college courses for
high school students, perhaps especially in rural Minnesota. Districts are also looking to AP as
an alternative to concurrent enrollment and PSEO due to the negative funding implications of
both models. One stakeholder commented that PSEO by contract, which allows the faculty
member to deliver a course at the high school or online, can be a better solution for students
who want to take a single course or when a high school lacks a teacher credentialed to teach a
single course of interest.
Counterpoints from some stakeholders
A handful of stakeholders offered the following counterpoints to arguments against the current
PSEO funding model:
• “These aren’t your kids.” School choice options such as district-level open enrollment
codified in state law allow students and families to choose where students will receive
educational services. Opponents of the current PSEO funding model argue that some
districts are attracting students from other districts by offering more PSEO opportunities,
potentially offsetting the financial loss of offering PSEO at volume. Some stakeholders
argued that districts shouldn’t view students living in their district boundaries as “their”
students.
• Districts commonly misunderstand the PSEO funding model. One stakeholder observed
that districts sometimes attempt to limit PSEO access because districts are losing
significant funding (even for a part-time PSEO student), when in fact districts are
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receiving funds for the amount of time a PSEO student is filling a seat in a high school.
However, counselor time is not adequately compensated under the current model, and
small high schools in particular struggle with economies of scale in staffing the same
courses and maintaining the same facilities and supports for fewer students.
• One stakeholder noted: “As we look at things that peck away at why students are leaving
rural schools, PSEO is one of the smaller issues. Yet it is an issue because the current
PSEO funding model is taking money away from K-12 schools to enhance choice.”
Current PSEO funding formula impact on postsecondary
institutions
Stakeholders commented that the current funding model creates a net loss not just for school
districts, but also for postsecondary partners. For all institution types – two- and four-year, public
and private – the state reimbursement is intended to pay for PSEO student tuition, as well as
fees, textbooks, course materials, and services offered the student (e.g., disability services,
tutoring, etc.)
In practice, PSEO reimbursement fully or nearly covers tuition paid by regularly matriculated
students at two-year colleges, but two-year colleges must absorb non-tuition costs. For public
and private four-year institutions, the tuition reimbursement is substantially lower than the tuition
revenue generated by regularly matriculated students; as such, four-year institutions must
absorb not only the non-tuition expenses as their two-year counterparts, but substantial lost
tuition revenue as well.
Stakeholders also referenced the fact that some institutions refuse to admit PSEO students to
CTE courses with substantial material costs (e.g., photography, culinary, welding), because the
expense of covering those materials is cost-prohibitive.
Stakeholders were asked if any state, local K-12 or institution-level stakeholders were in support
of the current PSEO funding formula. No stakeholders interviewed championed the current
PSEO funding formula; stakeholders added that the present PSEO funding is unpopular across
role groups statewide. However, a few stakeholders countered complaints they had heard about
the existing PSEO funding formula:
• While postsecondary institutions bemoan lost tuition revenue that PSEO students incur,
there’s less revenue loss than institutions complain about if PSEO does in fact fill an
empty seat for a course already being offered (unless an institution is offering a course
section exclusively for high school students, which goes against the intent of PSEO).
• Related to the above: Institutions creating a cohorted class just for high school students,
either through the standard PSEO funding formula or via PSEO by contract in a fully
cohorted model, aren’t building upon the original intent of allowing high-achieving
students to access spare seats in courses that are already being offered.]
PSEO funding formula impact on students
M.S.A. § 124D.09, Subdivisions 6 and 7, requires students in grades 8-11 and their parents to
be provided with information on PSEO a few weeks before they’re eligible to register for
courses. In spite of this notification requirement, the majority of stakeholders interviewed noted
that some district practices discourage students from PSEO participation by:
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• Withholding information about PSEO from students and families, including by sharing
information only if students or families ask for it
• Not posting PSEO information (or posting outdated PSEO info) on district websites
• Telling students and families that if students participate in PSEO, they cannot access
technology or services (e.g., counseling) offered at the high school, participate in student
events (e.g., prom), extracurricular activities (student government, sports, etc.), or even
go inside the high school building, which goes against state policy.
Multiple stakeholders referenced the Fulda lawsuit filed in 2016 by the family of a Fulda
High School student who was taking PSEO courses online and studying in the school
library or study hall when not taking online classes. Per a district policy, the student was
prohibited from being on the high school campus while not in attendance in high school
courses. The case was dismissed in October 2016 on the grounds that it was “quasi-
legislative” (impacting the rights of PSEO students generally) rather than “quasi-judicial”
(impacting an individual’s rights).
The legislative session following the resolution of this lawsuit, M.S.A. § 124D.09 was
amended to clarify that PSEO students must be allowed to remain at the school site
during school hours and must have reasonable access during regular school hours to a
computer and other technology resources the student needs to complete PSEO
coursework.
• Weighting AP, IB, and concurrent enrollment course grades but not PSEO course
grades, which discourages PSEO participation among students seeking to be
competitive in college applications, and/or vying to be valedictorian.
Some suggested that districts’ withholding of information or not posting PSEO information may
be a holdover from earlier legislation that prohibited programs from marketing PSEO. However,
this earlier legislation prohibited postsecondary institutions, not secondary partners, from
“[advertising] or otherwise [recruiting] or [soliciting] the participation of” high school students “on
financial grounds[.]” The provision was amended in 2012 to permit postsecondary institutions to
“advertise or otherwise recruit or solicit a secondary pupil to enroll in its programs on
educational and programmatic grounds only.”
At least one stakeholder observed that not publicly posting PSEO information may have been
an unintentional oversight on the part of districts.
Stakeholders also voiced concerns that:
• Districts sometimes limit the number of 5-credit CTE courses a PSEO student takes due
to a misperception that the district cost of such coursework may exceed the student’s
actual ADM.
• Free and reduced-price lunch PSEO students on a college campus midday miss out on
meals offered by their high school. While some postsecondary institutions operate food
pantries, high school students may be ineligible to access the food they offer. One
stakeholder suggested that the new funding formula include consideration of how low-
income PSEO students will obtain the lunches they would otherwise receive at their high
school (e.g., require high schools to maintain contact with institutions to make sure
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PSEO students can access meals through the institution’s food court, or access meals
while on-campus through other avenues).
• PSEO students miss out on the high school culture and experience. One of the aims of
PSEO is to provide students with early exposure to the college environment. However,
one stakeholder observed that due to differences in students’ maturity levels, the college
environment may be good for some but not all high school students.
• PSEO students often hold leadership roles in school activities. These students’ absence
from the high school while they’re participating in PSEO at the college campus creates a
vacuum in student leadership.
PSEO transportation reimbursement
M.S.A. § 124D.09, Subdivision 22 permits a parent or guardian of a PSEO student whose family
income is at or below the poverty level, as determined by the federal government, to apply to
the student’s school district for a reimbursement for transporting the student to and from the
student’s home and the postsecondary institution. Since 1992, the statutory reimbursement has
been capped at the lesser of the actual cost of transportation or 15 cents per mile, up to 250
miles per week. If the postsecondary institution is more than 25 miles from the student’s
resident secondary school, the reimbursement may not exceed the reimbursement rate per mile
times the actual distance between the secondary school or the pupil's home and the nearest
postsecondary institution times 10.
As such, the transportation is exclusively a mileage reimbursement, and does not reimburse
other transportation options such as bus passes or ride shares.
Stakeholders noted several issues with the transportation reimbursement:
• The mileage reimbursement amount falls far below the actual cost of transporting a
student to and from a college campus.
• Even if families were reimbursed for the actual cost of transporting a student,
reimbursement presumes that a family can afford to pay gas expenses and wait for
mileage reimbursement.
• The reimbursement process also assumes that families or students have a car available
for a student to drive to campus. In other words, even if a family has a car, a parent may
have the car at their worksite when their child would need transportation to and from the
college campus.
• The transportation reimbursement process is cumbersome: A low-income parent has to
request reimbursement from the district; the district in turn requests reimbursement from
the Minnesota Department of Education. Even if the reimbursement amount were
increased, the process could be made much easier for families.
• In some cases, the reimbursement is underutilized because it is under-advertised.
• There is no state reimbursement for districts or postsecondary partners wanting to
transport PSEO students to and from the college campus, another example of the
limitations of the policy.
As a result of the above factors, the transportation reimbursement is underutilized. Due to the
low volume of requests for PSEO transportation reimbursement, the state appropriation for the
PSEO transportation reimbursement dropped from $20,000 to $11,000 in FY 2021.
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Stakeholders commented that partly due to the transportation reimbursement process, low-
income students are underrepresented in PSEO. One stakeholder felt that the combination of
transportation and food security are the greatest barriers to PSEO participation among low-
income students.
PSEO by contract
As previously mentioned, PSEO by contract allows district and postsecondary partners to
establish their own tuition payment systems. PSEO by contract was perceived by some
stakeholders to be a win-win for districts and postsecondary partners.
Two stakeholders observed that PSEO by contract agreements usually pay institutions slightly
more than the state reimbursement. Another commented that some district administrators prefer
PSEO by contract because they have a better line of sight of where district funds are headed; in
the words of this stakeholder, districts’ ADM loss feels like a loss of control, or a lack of
understanding of where the money is going.
However, stakeholders commented that superintendents don’t always understand the true cost
of making a course available through PSEO. What is more, schools sometimes exclusively
assess the cost of fall enrollment in a course, not considering whether they can afford to offer
the next-level course in the spring. A funding model that makes the true costs of course delivery
clear and that doesn’t disincentivize student participation is critical.
Stakeholders were split on whether PSEO by contract is, in reality, more financially
advantageous to districts than statutory PSEO model. For example:
• If a student is full time PSEO the school is still retaining 12% of its ADM for the student.
One stakeholder asked, “Why would you walk away and potentially have a worse deal
with another college?”
• With the advent of contract templates, some stakeholders were unsure on how much
flexibility or leverage districts have in negotiating contracts with institutions.
• One stakeholder raised the possibility that PSEO by contract (e.g., in the instance of a
large district contracting with a large public institution) could result in the institution
reserving PSEO seats for students from the partnering district, making it more difficult for
students from smaller districts to access PSEO seats in those same courses.
Advocates of PSEO funding formula
Most stakeholders commented that while anecdotally the PSEO by contract model is
increasingly popular, the current PSEO funding formula, in which districts’ ADM covers students’
PSEO tuition costs, has few advocates. This is because:
• Regardless of district size, districts lose ADM for each course a PSEO student enrolls in.
• Postsecondary institutions also lose funds, some more than others based on the
difference between the tuition a regularly matriculated student would pay and the PSEO
reimbursement rate plus the textbooks, fees, and course materials costs the
postsecondary partner must cover.
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Recently proposed alternatives to current PSEO funding model
Stakeholders almost unanimously commented that no state-level stakeholders had presented
concrete alternatives to the current PSEO funding model. Rather, state and local stakeholders
have expressed concerns about the shortcomings of the current funding model.
Stakeholder responses to select other states’ dual enrollment
tuition funding models
During each interview, the author of this report provided each stakeholder with a thumbnail
sketch of the dual enrollment funding models in Indiana, Idaho and Iowa, and the potential
advantages of these programs in supporting equitable student access, participation, and
success. These states’ dual enrollment funding models were chosen because:
• Dual enrollment students in Idaho and Iowa pay no tuition; Indiana students usually pay
no tuition
• Districts are mostly or fully held harmless. In other words, depending on the state and
model, districts either do not pay tuition, pay minimal tuition, or receive a partial tuition
reimbursement. Districts in these states also receive the same state aid for students
enrolled in college courses and traditional high school students
• Indiana, Idaho, and Iowa serve predominantly rural schools; Indiana and Iowa are
Midwestern states
• Idaho, Indiana, and Iowa are witnessing growth in dual enrollment participation, including
among rural students, and are narrowing participation gaps among low-income and non-
low-income students, as well as among students of color and their peers.
Stakeholders were asked to what extent these models might be politically and fiscally feasible to
state and local K-12 and postsecondary stakeholders in Minnesota.
Stakeholder feedback suggests that, rather than adopting another state’s model
wholesale, Minnesota might consider drawing from various features of multiple states’
dual enrollment funding models.
Indiana
Indiana’s funding model incentivizes students to enroll in – and institutions to offer – general
education and select CTE college courses at a public high school, taught by a high school
teacher. These courses are referred to as “dual credit” courses (“dual enrollment” courses are
college courses offered at the campus and are not covered under this funding model). CTE
courses funded under this model are annually approved by the Indiana Department of
Education and Indiana Commission for Higher Education, and lead to an industry-recognized
credential.
By statute, students in approved CTE courses and low-income students in specified general
education courses are charged no tuition. Ivy Tech, the statewide community college system
and provider of the majority of dual credit courses statewide, does not charge dual credit
students tuition, regardless of family income. Non-low-income students in general education
courses offered by providers other than Ivy Tech may be charged no more than $25 per credit
hour; however, in practice many public institutions waive tuition for all dual credit students.
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Public two- and four-year institutions are granted an additional weight in each biennial budget
based on reported headcount in CTE and specified general education dual credit courses. This
additional weight, which in the most recent biennium was roughly $40 per credit hour, defrays
the cost of program administration, including offering professional development to high school
instructors of these courses.
Ivy Tech’s Ivy+ model for the 2021-22 and 2022-23 academic years covers textbook costs for
both matriculated students and dual credit students. For courses offered through other
institutions, the entity responsible for textbook costs is determined in the agreement between
the K-12 and postsecondary partner.
Stakeholders generally felt the Indiana model was worth exploring. One stakeholder believed K-
12 leaders in particular would be very interested in this model.
Stakeholders perceived the Indiana model could work in Minnesota if:
• The ask is framed in the right way. The political environment may change after the
November 2022 elections.
• Students are not charged tuition.
• Students aren’t capped in the number of courses they can access, and districts or high
schools aren’t capped in number of students who can participate.
• Transportation isn’t a barrier to student participation.
• Homeschool students can also participate, as they can in PSEO in Minnesota.
• Private institutions can also participate. A fair number of private institutions participate in
PSEO
• Indiana also considers efficiency of scale in offering a single class to students across
multiple high schools and/or districts (in-person or remotely). Rural districts are
struggling because of the efficiency issues that small schools face.
However, stakeholders noted the Indiana model could present challenges if Minnesota goes
from charging PSEO students no tuition or other course costs, to students paying any cost (e.g.,
for tuition, textbooks, course fees, materials, etc.)
Idaho
Each public school student in grades 7-12 receives $4,125 in an Advanced Opportunities
account, which they can use to pay for dual credit tuition; Advanced Placement (AP),
International Baccalaureate (IB), College-Level Examination Program (CLEP) or industry-
recognized credential exam fees; regionally-approved workforce training courses; or courses,
including but not limited to online courses, taken outside the regular school day or school year.
Due to geography, most dual credit courses are offered by approved high school instructors,
although students may also use Advanced Opportunity funds to complete courses offered at the
postsecondary campus or online. Public and private institutions may charge no more than $75
per credit hour for dual credit courses. Depending upon the local agreement between the K-12
and postsecondary partner, textbooks and fees may be absorbed by the partnering institution,
paid by the school district, or charged to the student’s family.
The Advanced Opportunities program is supported by an ongoing appropriation. Any funds a
student has not used upon high school graduation revert to the general fund.
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The Idaho model was the favorite of these options among some stakeholders; for other
stakeholders, this was not the preferred model but they felt this model could be palatable in
Minnesota, including in part because Minnesota already pays for all public school students’ AP
and IB exam fees. Stakeholders noted that the funds the state already pays for PSEO,
concurrent enrollment, AP, and IB, could be consolidated into a single account families could
access for these purposes.
Stakeholders perceived the Idaho model could work in Minnesota:
• If homeschool students can also participate
• If private institutions can also participate
• Because of the precedent in Minnesota to providing parents with public funds for early
childhood education expenses. This program has resulted in increased equitable access
to quality early childhood education.
• If it is clearly communicated that this is not a reimbursement model requiring families to
front tuition costs. A reimbursement model would deter participation among low-income
families.
• If there were a cost-benefit analysis of what Minnesota is already paying for
PSEO/concurrent enrollment/AP/IB, and how Minnesota’s current investment in these
opportunities would compare to investment to offer an account to all students.
• It would be a selling point that the unused dollars revert back to the legislative general
fund and do not take away money from the general allocation.
• Need to clearly communicate how much money this would be annually in Minnesota
since Minnesota has many more students than Idaho.
• State agency leadership could be supportive of this model.
Potential challenges:
• Would need to look at the financial impact, e.g., how much is currently spent on PSEO
and AP
• State agencies may be less inclined to adopt this model due to a concern that that level
of “backpack funding model” would not close equity gaps and could even exacerbate
equity gaps.
• Higher education may be concerned about a potential cut to their reimbursement rate, in
the context of Idaho’s $75/credit hour reimbursement rate replacing current
reimbursement rate. At Minnesota’s FY 23 reimbursement rate of $679.86 for a three-
credit course, $225 for a three-credit course would reflect a roughly 66% reduction in the
current Minnesota reimbursement rate.
• There is a potential that this model restricts access if students exhaust their state funds
and want to enroll in more courses.
• This model may be perceived as a quasi-voucher by teachers’ unions, or by public
postsecondary institutions that this is giving more money to private institutions.
Iowa
Some 97% of college courses delivered to high school students are through the contract model.
Per this model codified in I.C.A. § 261E.8, school districts and two-year colleges may enter into
partnerships to offer college courses at the high school, online, or at the college campus.
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Courses may be CTE or general education courses, and may be delivered at the high school,
college, or online; instructors may be approved high school teachers or college faculty.
Tuition costs are borne by the district; the amount of tuition the district pays to the
postsecondary partner is determined in the local agreement. The local agreement also dictates
who is responsible for textbook and other non-tuition expenses. Districts report enrollment in
these contract courses to the state. In the following year, the state funding formula generates an
additional weight for the portion of the school day a student was enrolled in college
coursework—.7 for CTE courses and .48 for liberal arts courses.
Students from accredited nonpublic schools and homeschool students may access courses
delivered through this model. Homeschool and nonpublic school students may enroll in courses
through the district in which the nonpublic school is located. A nonpublic school is also
authorized to enter into an agreement with a college, as if the nonpublic school were a school
district.
• This model was the favorite among some stakeholders because it most closely
resembles the PSEO by contract model or because it drives CTE dual enrollment
course-taking.
o Some stakeholders noted that CTE is very popular at this time and receives
bipartisan support. A model that recognizes that CTE dual enrollment is more
expensive would be beneficial.
• Iowa’s model was the second favorite model among some stakeholders
• This model was the least favorite model among some stakeholders because
o Districts stand to lose some money on this model, unlike the Idaho and Indiana
models. Also, institutions could conceivably charge districts different amounts for
the same course, unlike in Idaho (although PSEO by contract allows institutions
to charge districts different amounts for the same course as well).
• This model could work in Minnesota if:
o The same funding model were applied regardless of where the course is offered
and by whom (faculty member or approved high school teacher)
o Homeschool students can also participate
o Private institutions can also participate
o This were seen as potential long-term solution. Currently there are no weights in
Minnesota’s student funding formula
• More clarification is needed on:
o How Iowa arrived at the weighting amounts for liberal art and CTE courses, and
how much per-pupil funding districts lose between the cost paid to institutions
and the weighted funding districts receive the next legislative funding cycle.
o How this works when a student takes a course at the college campus (e.g., it
could raise some questions if the district is getting a bump even when students
go to the college campus)
Conclusion
Minnesota’s PSEO program, established in legislation in 1985, was the first state dual
enrollment policy in the nation. Initially framed as a program to support general education
course options for the most advanced learners and fill empty seats in courses institutions were
already offering, the program today increasingly offers both academic and CTE courses to both
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middle- and high-achieving students, including in course sections primarily filled with high
school students.
Concerns have been raised about the perceived growth in PSEO by contract, as well as the lack
of data in the Rigorous Course Taking report documenting the number, geographic location, and
background of students enrolled in college courses through PSEO by contract. Feedback
gathered from remote interviews with state and local K-12 and postsecondary PSEO
stakeholders indicates that most stakeholders were not in favor of the current PSEO formula
funding model and were mixed on the benefits and disadvantages of the PSEO by contract
model, including the potential negative equity implications of this model. Stakeholders were
unanimous that the PSEO transportation reimbursement model for low-income students needs
to be revisited, as the model requires families to pay up-front and wait for a negligible
reimbursement amount for gas mileage; bus passes and ride shares are not reimbursed under
the model.
Stakeholders expressed interest in the Idaho, Indiana, and Iowa models, although they
expressed various concerns about each model’s potential negative impact to students and
families, districts, and postsecondary institutions. No state’s model was a clear winner among
stakeholders. Should Minnesota opt to select a new PSEO funding model, the state might
consider specific components of each of these or other states’ models, to continue aspects of
the current PSEO model that stakeholders and Minnesotans value – namely, that students do
not pay for tuition, textbooks, or fees; private and home schooled students may participate;
public four-year institutions and private institutions may participate; and, depending on the
agreement with the partnering institution, students might be able to access both CTE and
general education courses and not have caps on the number of credits they can complete
through PSEO.
