Higher Ed Gets Small Bump in 2016 but Adult Financial Aid Rejected


Universities and community colleges in Michigan will receive small increases in state funding next fiscal year, but students will get no additional relief with lawmakers rejecting boosts to financial aid programs.

Because Michigan does not have a state agency that exercises financing or policy authority over its universities and community colleges, the Legislature funds those institutions through the Higher Education and Community Colleges budgets.

Michigan’s three existing financial aid grant programs (the Tuition Incentive Program, the Competitive Scholarship and the Tuition Grant) are funded through the Higher Education budget even though community college students may also apply for and receive those grants. The reinstatement of a grant for adult learners had been proposed by the governor in the community college budget for 2016, but was not included in the final agreement between the House and Senate.

For 2016, the governor recommended:

  • A total increase in funding for university operations of $26.8 million (2%) over the current fiscal year. As in previous recent years, this increase was in the form of performance funding using the following metrics: weighted undergraduate completions in critical skills areas, research expenditures, 6-year graduation rates, total completions, administrative costs as a percentage of core expenditures, and the percentage of students receiving Pell Grants. The governor’s budget continued the practice of requiring universities to limit tuition increases in order to receive any performance funding, but lowered the limit from 3.2% to 2.8%. This “tuition restraint” prerequisite for receiving performance funding helps keep postsecondary education affordable for low-income students.
    • Senate: The Senate concurred with the governor’s operational funding level.
    • House: The House increased university operations by only $13.1 million (1%) and allowed tuition increases up to 4% — essentially shifting more of the cost of operational spending increases to students.
    • Final Budget: The Legislature increased university operations funding by $20 million or 1.5%.
  • A 1.4% increase ($4.3 million) in total operational funding for Michigan’s 28 community colleges, half of which was to be distributed as performance funding for weighted degree and certificate completions, enrollment, and administrative costs as a percentage of core expenditures. This proposed increase was less than half of that for FY 2015 (3% increase or $8.9 million). As in previous recent years, the majority of overall funding for community colleges (which includes not only operational and financial aid funding, but retirement funding, etc.) was from the School Aid Fund, and only 35% ($137.1 million) was from the General Fund.
    • Senate: The Senate concurred with the governor’s funding levels.
    • House: The House increased operational funding by 2% ($6.1 million).
    • Final Budget: The Legislature concurred with the governor and Senate with an increase of 1.4%.
  • No funding increases for the three major financial aid grant programs—the first time in many years that the Tuition Incentive Program has received no increase. None of the grants currently funded through the higher education budget are available to students who have been out of high school for more than ten years. Of the total funding for the higher education budget grant programs, $98.3 million is from the federal Temporary Assistance for Needy Families allocation while $7.8 million is from the state’s General Fund. The governor also added a requirement to the Tuition Grant that in order for private college students to receive the grant, the college must submit annual data to the state P-20 longitudinal data system.
    • Senate: The Senate concurred with the governor’s funding levels for each grant program but does not include the P-20 data submission requirement.
    • House: The House added $327,500 for the Tuition Grant and does not include the P-20 data submission requirement.
    • Final Budget: The Legislature agreed with the governor in keeping financial aid grants at 2015 levels and did not include the P-20 reporting requirement.
  • An appropriation of $6 million to the community college budget for the Part-Time Independent Student Grant, which helps older students—the first time this grant would have been funded since 2009. Unlike previous years, the grant could only be used at community colleges and priority was to be given to former postsecondary students who left prior to completing a degree or certificate.
    • Senate: The Senate concurred with the governor’s funding levels and new conditions for receiving the grant.
    • House: The House funded the grant at $2.9 million and kept the new requirements.
    • Final Budget: The Legislature did not include funding for the Part-Time Independent Student Grant program.