College grant aid falls

Nov. 20, 2012
Contact: Judy Putnam at (517) 487-5436 or jputnam@mlpp.org

College less affordable in Michigan with big cuts to need-based grants

[LANSING, Mich.] — Michigan policymakers dramatically disinvested in state financial aid grants over the past decade, weakening a key strategy to keep postsecondary education affordable, a new study concludes.

Keeping it Affordable in Michigan, a report by the Michigan League for Public Policy, finds that over the last decade Michigan policymakers:

• Cut need-based grants by 20 percent while other states increased their need-based grants by 84 percent.
• Invested the least in grant dollars per student in the Midwest.
• Offered grants to only 14 percent of students, ranking Michigan 40th from the top.
• Gave a large share of need-based grants to students from higher-income families attending private colleges.

“There’s a growing consensus that not only is postsecondary education necessary for individual success, it’s vital to creating a competent workforce. Unfortunately, public policy decisions do not reflect this thinking at all. In fact we are swiftly moving in the wrong direction,’’ said Karen Holcomb-Merrill, policy director at the Michigan League for Public Policy.

At most public universities in Michigan, tuition has doubled in the past 10 years. Students graduating in 2013 will pay more than twice students who graduated in 2003. Even at the more-affordable community colleges, tuition has increased, on average, by more than 50 percent over the decade. Yet Michigan spent only $84.6 million on need-based grants in 2010-11, a 20 percent cut from 2000-01. Overall state grant aid, including need-based aid, is the lowest in the 22 years that the information has been published.

The report questions if Michigan is targeting the right students for grants, which, unlike loans, do not have to be paid back. Of the approximately $1.8 billion in need-based grants that Michigan awarded over the past 20 years, 68 percent went to students attending private colleges while 32 percent went for tuition at public colleges and universities.

And only a small share of grant aid is flowing to students from very low-income households with just 9 percent of the Michigan Competitive Scholarship going to students with family incomes of $20,000 or less. For the Tuition Grant Program, which only goes to pay tuition at private colleges, 17 percent went to students from families with income of $20,000 of less.

Among independent students (not relying on help from families) three-quarters of grants for students in public universities went to those earning less than $20,000 while less than half of students in private colleges were earning less than $20,000.

Among recommendations in the report:

• Prioritize state appropriations for state need-based grant programs.
• Use appropriations process to encourage tuition restraint.
• Target students in need in grant-based programs
• Modernize the state’s revenue system in order to support the investment needed.
• Revisit cuts to students receiving public assistance.

The report is available at www.mlpp.org.

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The Michigan League for Public Policy, formerly the Michigan League for Human Services, is a nonpartisan, nonprofit organization promoting economic security through research and advocacy.