Michigan lawmakers prepare to tighten college financial aid budget
Marisa Schultz / The Detroit News
Thousands of college
students counting on state merit scholarships this fall may be in for a
surprise, as lawmakers are poised to gut the state's financial aid budget.
A Senate Appropriations
subcommittee will likely take the first step in that direction today when it
takes up a bill to eliminate the Michigan Promise Scholarship and slash the
budget for need-based grant programs.
If the House, the full
Senate and the governor sign off on the plan, its impact would be immediate,
forcing colleges to redo financial aid packages and families to scrape up the
cash or loans.
"It's not going to be
popular and it's not going to be pretty," Matt Marsden, spokesman for
Sen. Majority Leader Mike Bishop, R-Rochester, said of the magnitude of
financial aid cuts that need to be made.
More than 96,000 students
who have graduated since 2007 are expecting Michigan Promise scholarships
ranging from $1,000 to $4,000 this fall. Students earn the grants by passing
a standardized test or successfully completing two years of college.
Uncertainty over whether
the money they were promised will be given is frustrating parents like Donald
Neely of White Lake Township.
"People use that promise
for their plan," said Neely, whose son will start at Alma College
this fall. "Fortunately we are in a position where we are able to make
that up. Other people are not. There are people who are going to be
tremendously hurt by this."
The cuts are necessary
because the state is facing a $1.7 billion deficit for the fiscal year that
begins Oct. 1. As a result, House and Senate leaders called on their
committees to hack their budgets -- $525.8 million in cuts in the House and
up to $1.2 billion in the Senate.
Stimulus rules limit options
The higher education cuts
will land disproportionately on financial aid because $1.42 billion of Gov.
Jennifer Granholm's proposed $1.71 billion higher education budget goes for
operations of the 15 public universities. Accepting federal stimulus dollars
precludes the state from slashing funding to universities -- each university
would see just a 0.4 percent cut under the Senate subcommittee plan -- so
that leaves financial aid the only area left to cut.
In addition to the elimination
of the popular $140 million Michigan Promise Scholarship program, the Senate
higher education subcommittee bill would reduce need-based grant programs
from about $139 million last year to about $85 million this year. That would
wipe away the $7.3 million work study program, the $2.7 million part-time
independent student grant program and $2.1 million Michigan Education
Opportunity Grant program, according to documents obtained by The Detroit
Other need-based grant
programs would be dramatically cut. The Tuition Grant program, which awards
up to $2,100 to students at private colleges, would be trimmed from $56.7
million to $31.7 million. Funding for the Competitive Scholarship that awards
up to $1,300 per student would by slashed from $35.5 million to $16.3 million
under the proposal.
"This is a huge
budget deficit we are facing, of an unprecedented amount," said Rep.
Joan Bauer, D-Lansing, chairwoman of the House higher education subcommittee.
"In higher education, this means massive cuts to financial aid at a time
when we really should be investing more, not less, in helping kids get a
Need-based programs have
been targeted for cuts all year, so the state didn't send out award letters
to recipients in May, as it typically would.
However, the state sent
congratulations letters to 41,666 high school juniors last year alerting them
to their Michigan Promise scholarships.
"It's called the
Promise grant," said Michael Boulus, executive director of Presidents
Council, State Universities, which represents the 15 public universities.
"The letter went out promising students they would receive the funds.
And to pull the money out from them at this late in the game, it's going to
create some real economic challenges for Michigan families."
MSU can't cover all losses
At Michigan State
received $50 million in state-sponsored scholarships last year, including
$13.4 million in Promise scholarships and $5 million from the state
If the state pulls the
plug on these programs, MSU doesn't have money to replace the loss for all
students, said Val Meyers, associate director of financial aid at MSU.
The University of Michigan,
which has committed to covering the gap between undergraduates' scholarships
and other funding and the cost of tuition, would need to spend $3 million to
replace the loss of Promise scholarships for students in financial need, said
Pamela Fowler, executive financial aid director.
Said Marsden, the
spokesman for Bishop: "Cutting higher education is never really popular
with the public; neither is cuts to State Police, cuts to corrections and ...
layoffs. This is a universal situation. ... But at the end of the day, we
only have so much money to work with."
The state may face public
outcry over pulling the Promise scholarship, but legally it's possible, some
lawmakers say, because the statute allows the state to reduce scholarships to
students if money isn't appropriated to fund the program.
After today's action, the bill
could head to the full Appropriations Committee on Wednesday and then on to
the full Senate shortly thereafter, sources say. The legislation would then
head back to the House.
House Republicans haven't
taken a position on what to cut: merit-based aid vs. need-based. But House
Speaker Andy Dillon, D-Redford
preserving scholarships for the neediest students is paramount.
"When it comes to
cuts to scholarships and higher education, we need to do everything in our
power to protect those who need help the most," Dillon said in a
But Granholm is a champion
of the Promise Scholarship. Her spokeswoman wouldn't speculate on whether
she'd veto a bill that eliminated the program.
No matter the outcome,
financial aid leaders and families hope the decision comes quickly.
"It would be nice to
know sooner rather than later so we can let students know," Fowler said.