BISMARCK, N.D. — North Dakota State University on Thursday announced a new scholarship program amid higher education leaders’ worries of losing Minnesota students eligible for free tuition in their home state under a new program beginning next year.

The university is offering its Tuition Award Program for the 2024-25 school year. Minnesota’s North Star Promise program begins in fall 2024. It will cover undergraduate tuition and fees at the state’s public post-secondary schools and tribal colleges for Minnesota residents whose family income is under $80,000, after they have used other sources of financial aid, such as grants and scholarships.

North Dakota State University President David Cook has spoken of “catastrophic implications” due to North Star Promise. North Dakota State is the No. 1 out-of-state choice for first-year Minnesota students, who make up nearly half its student body. The Fargo-based university is just across the Red River from Minnesota.

The Tuition Award Program came about because of North Star Promise, confirmed Seinquis Leinen, the university’s senior director of strategic enrollment management.

The new scholarship is available to North Dakota and Minnesota first- and second-year students who are eligible for the federal Pell Grant and whose family income is $80,000 or less — nearly identical to North Star Promise.

“We wanted to offer a similar program,” Leinen told The Associated Press. “To offer similar programs to students allows them to better analyze and explore their different options, and again, knowing that a lot of our students come from Minnesota, wanted them to be able to be aware of other options that are right in their neck of the woods and right on the other side of the border.”

The scholarship will cover those students’ base tuition and fees “after all other gift aid is applied,” she said.

About 1,000 students are expected to be eligible, Leinen said. The program is estimated to cost $3.5 million, covered by the NDSU Foundation. The university will explore future funding for the scholarship, she said.

State leaders view higher education as a key component to addressing North Dakota’s labor shortage. Eighty-two percent of North Dakotans and 42% of Minnesotans who graduate from North Dakota State pursue their first job in North Dakota, Leinen said.

Democratic state Sen. Tim Mathern is proposing a workforce-focused “Dakota Promise” forgivable student loan tuition program for the next legislative session in 2025. He commended North Dakota State’s new scholarship but said a “long-term solution” was needed.

“We, in fact, need to do something about free tuition,” Mathern said. “However, we need to do it in a creative manner wherein we’re solving issues for the long term, not just a knee-jerk response to what Minnesota has done.”

About 15,000-20,000 Minnesotans could use North Star Promise in its first year, according to the state’s Office of Higher Education.

About 1,400 Minnesota students at five eastern North Dakota institutions might be eligible for the Minnesota program, according to the North Dakota University System.

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