Michigan college scholarships are good. We can still do better.

Posted by Michelle Miller-Adams on October 21, 2022 at 9:31 AM

Michelle Miller-Adams is a senior researcher at the W.E. Upjohn Institute for Employment Research and a CFCT board member. The opinions represented in this posting are hers and not necessarily those of CFCT. This opinion piece was originally published at Bridge Michigan.

The cost of college is under growing scrutiny, as President Joe Biden’s student loan forgiveness plan underscores the financial obstacles to higher education and Americans of both parties become more skeptical about the value of a college degree.

It is against this backdrop that advocates for students and others concerned about Michigan’s plunging college-going rates cheered news that the state will more than double funding for scholarships at public colleges and universities. The Michigan Achievement Scholarship will offer students new financial aid of up to $5,500 a year for as many as 5 years. It is a generous and inclusive scholarship, with experts estimating that 75 percent of Michigan families would be eligible.

The new scholarship, along with Michigan Reconnect, a free-college initiative for adults, gives the state valuable tools in the quest for a more educated workforce and makes Michigan’s public colleges and universities far more accessible. But it is not a sure thing. The scholarship is complex, which makes it hard to explain to the public. And powerful trends — a shrinking pool of high-school graduates, a strong labor market, rising tuition rates and a counterreaction to the “college-for-all” message — have led to sliding college enrollment rates in Michigan that predate the pandemic.

Research suggests money makes a difference when it comes to college enrollment, and the new scholarship brings substantial new money to students. Beyond the $5,500 a year for attendance at a public four-year college, students attending a community college or tribal college would receive up to $2,750 a year (for 3 years), while those enrolled at a private, nonprofit college are eligible for up to $4,000 a year. Occupational training programs are also included, with students eligible for $2,000 in training grants.

Students qualify for the new scholarship if their “Expected Family Contribution” (EFC) toward college costs is less than $25,000. For a family with one college student, this translates to a household income of around $100,000 — well above the state’s median income of $64,488. For a student eligible for a maximum Pell grant, the combination of federal financial aid and the new state scholarship will nearly cover tuition at most Michigan public universities.

The legislation, approved by bipartisan majorities of 33-0 in the Senate and 78-26 in the House, includes some helpful provisions: all eligible students are provided with some “new” money even if they already receive ample grant aid (for example, at 4-year institutions, students would be guaranteed $2,500 a year in new funding), and “maintenance of effort” language ensures the new aid will add to rather than supplant existing resources.

Michigan Achievement will certainly help the state reach its goal of having 60 percent of working-age adults with a skill certificate or college degree by 2030, announced with great fanfare by Governor Whitmer in 2019, but which Michigan is struggling to stay on pace to meet. As always, though, the devil is in the details. The state will need to broadcast a robust message about the new financial aid, explain to new and returning students how it will reduce their college costs, ensure that colleges and universities can seamlessly administer the program and ideally index the scholarship’s value to inflation.

While Michigan’s efforts to cobble together a college-affordability plan are laudable, there are easier ways. About half the nation’s states have created tuition-free college programs for at least some portion of their populations, although only a few cover the more expensive four-year public sector. The simplest and most generous approach was taken by New Mexico, where the Opportunity Scholarship makes all in-state public institutions tuition-free for all residents, providing this aid before other grants. This means that low-income students retain use of their need-based aid to cover other college-going expenses.

Why can’t something similarly straightforward and equity-oriented happen in Michigan? Divided political leadership is one culprit (New Mexico’s governor had the advantage of a solidly blue legislature to go along with its large budget surplus.) Another is the extreme decentralization of the higher education landscape in which different sectors, and even individual institutions, compete for state funding. Anti-college sentiment or broader support for other priorities, such as K-12 education and infrastructure, could also be part of the story.

Whatever the constraints, the best Michigan can do for now is piecemeal programs with confusing provisions like EFC guidelines and first- plus last-dollar funding structures. Even so, it is encouraging to see such a dramatic increase in state spending on higher education. This good news is a product of relentless advocacy from the governor’s office, a huge windfall of COVID-19 money from the feds, and rare-these-days bipartisan championing, with the business community in the lead, that saw Republicans and Democrats coming together to support Michigan Reconnect and the new scholarship funding.

Whatever the reasons, the infusion of resources to build Michigan’s human capital could not have come at a better time. It has been clear for over a decade that many jobs of the future — now the present! — will require postsecondary education, with the pandemic underscoring this trend. Michigan is in the midst of an economic transformation from Rust Belt manufacturer to advanced technology, electric vehicle production and clean energy, and college-educated and credentialed workers are essential to this transformation. Can a major investment in financial aid, structured to reach most Michigan families, help build the workforce the state needs? We now have the chance to find out.

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