What to watch for in 2019 state budget

The state budget is a big focus of the League’s work each year, and often our most viable opportunity for victories for the people and kids of Michigan. And while we were disappointed that lawmakers passed a personal exemption increase, it should not affect this year’s budget as much as earlier proposals (the bigger cuts will be left to future legislators instead).

budgetandmagnifier175-by-116Here are the main things good and bad in—or absent from—Governor Rick Snyder’s 2019 budget that the League is keeping an eye on as the legislative process gets underway. You can learn more about these issues in our “First Look” at the governor’s budget and we will continue to provide updates on our budget page.

thumbs up The Good
  • Continues funding for the “heat and eat” policy that provides increased food assistance to families with low incomes, people with disabilities and seniors.
  • Supports the Healthy Michigan Plan that has provided health insurance for over 675,000 Michigan residents.
  • Provides $5 million for Michigan’s Early On program that identifies and serves infants and toddlers with developmental delays—the first investment of state funds in Michigan’s grossly underfunded early intervention program.
  • Provides a small increase in monthly Family Independence Program income support provided to children in deep poverty after decades of flat funding that pushed families to less than 30% of the federal poverty line.
  • Provides increases of between $120 and $240 per-pupil for the state’s public schools—with additional funding for students in high school or career and technical education.
  • Expands funding for partnerships with school districts that are needing academic supports from $6 million to $8 million.
thumbs down The Bad
  • Continues funding for Michigan’s successful preschool program for at-risk four-year-olds, but does not expand services to three-year-olds from families with low incomes.
  • Fails to expand funding for At-Risk School Aid and the school-based literacy programs needed to prevent the retention of children in third grade, including a disproportionate number of children of color.
  • Does not increase funding for adult education after deep cuts over the last two decades.
  • Leaves in place Michigan’s child care assistance eligibility cutoff, which is one of the lowest in the nation.
  • Diverts School Aid money intended for K-12 public schools to fund the state’s community colleges—rather than securing adequate General Fund revenues for post-secondary education.
  • Does not restore financial aid for an increasing number of college students who are older and supporting families.
  • Reduces cities, villages and townships (CVT) and county revenue sharing payments, neither of which have received full statutory funding in nearly two decades, so that many communities would either receive decreased CVT and county revenue sharing payments or no payment at all.
question mark The Absent

The League will keep pushing for these and other budget priorities in the coming months, and advocate for racial, ethnic and social justice in all state budget decisions this year and every year. We also encourage you to use our advocacy tips and budget timeline to get involved and speak up for the priorities you believe in.

— Alex Rossman

State Financial Aid Leaves Adult Learners Behind

 

Michigan needs to revamp its financial aid system to ensure that adult learners can build their skills, get a job and become economically secure.

Michigan’s job market is changing. For decades, many individuals became employed in the manufacturing sector immediately after graduating from high school at age 18, built up their skills on the job, and attained a livable wage with which they could support their families and retire with a pension.

Today, rather than teaching needed occupational skills on the job from “square one,” most employers who pay a livable wage expect their new hires to already possess those skills at some level. Sometimes prior experience is sufficient, but for many workers the attainment of required skills must be signified by a recognized credential such as a degree, license or certificate. These credentials are most often attained through completion of a postsecondary program at a community college, technical school or university.

Many workers find themselves needing to acquire new marketable skills with the expectation that doing so will lead to re-employment, higher pay or more job security. Some such workers may have been laid off, others may be trapped in low-wage jobs, and still others may be re-entering the workforce after an extended time as full-time homemakers. Many such individuals do not possess a postsecondary credential and will have a difficult time in the labor market (see Appendix 1).

 

Unfortunately, tuition has increased at community colleges by 31%, though it still compares favorably to other states. Universities increased by 49% since 2005, and Michigan’s public university tuition is the sixth-highest in the nation (Fig. 1). Due to the rising costs, these older workers often need financial aid to help pay for their training. Each year, more than 100,000 (and sometimes more than 150,000) individuals over age 30 in Michigan fill out the Free Application for Federal Student Aid, or FAFSA, which is also used to determine eligibility for state as well as federal aid. (Fig. 2).

 

 

 

 

 

 

The Problem

The decision to get trained in new skills is often made more than 10 years after graduation from high school. While state financial aid helps many students of traditional college age, there are no state financial aid programs to help students attend public community colleges or universities if they have been out of high school for more than 10 years. Two of the three existing grant programs explicitly exclude such individuals from eligibility, and the third is available only to those attending a private, not-for-profit institution:

Tuition Incentive Program: Eligibility rules require applicants to apply prior to high school or GED completion and before the 20th birthday, and the award must be used within 10 years of high school or GED completion—effectively preventing anyone older than age 28-30 from using the award.

Michigan Competitive Scholarship: Workers are ineligible if they are out of high school for more than 10 years, preventing students who graduated “on time” at age 18 from using the award once they pass age 28.

Michigan Tuition Grant: Workers and parents of any age are eligible, but their postsecondary education must be at a private not-for-profit institution. It is not available for use at community colleges, which offer programs specifically designed for students who are working or raising families (Fig. 3).

 

 

 

 

 

 

 

 

 

 

In addition, none of the three current grant programs are available to students enrolled less than half time or who are in short-term occupational programs. Students who are juggling employment, family and school must often go less than half time or enroll in a short-term program due to having to work and care for family members. As discussed in a recent paper by the Working Poor Families Project, while low-income adult students are likely to need employment to support their families and finance their education, working more than a few hours at a job can often result in lower grades and even dropping out. Not having financial aid may discourage adult learners from going to school less than half-time.1

In 2010, the Legislature eliminated a number of grant programs that were available to adult learners: the Adult Part-Time Grant, the Michigan Educational Opportunity Grant, the Michigan Nursing Scholarship and Work-Study. This may have been a factor in the 31% decline in FAFSA applicants age 30 and over for school year 2013-14. (See Appendicies 2 and 3).

It should be pointed out that there are employer-sponsored training programs in some areas of the state that are of low cost or no cost at all to the student. Michigan supports such programs through its Skilled Trades Training Fund and there are other programs available in some areas as well. However, for older working students who are in non-employer-based programs at community colleges and universities, there is no state financial aid available.

Policy Recommendations

Michigan should do the following to make it easier for adult learners to receive financial aid:

1.  Make need-based grants available to older workers by

a) reauthorizing funding for either the Adult Part-Time Grant or the Educational Opportunity Grant, both of which were specifically designed to serve adult learners in a wide variety of circumstances, or

b) modifying the eligibility rules of the Michigan Competitive Scholarship and/or the Tuition Incentive Program to allow older workers to qualify and to allow the money to be used for less than half time enrollment or for short-term occupational programs.

2. Implement a Work-Study program that subsidizes academically relevant work for low-income adult students while paying a livable wage. Studies show that working students are less likely to drop out or suffer academic setbacks if their work is related to their courses of study. Although the traditional Work-Study program was ended in 2010, Michigan could replace it with a carefully targeted program that connects employment to academics. (For more information, see the Working Poor Families Project paper Earn to Learn: How States Can Reimagine and Reinvest in Work-Study to Help Low-Income Adults Pay for College, Enhance Their Academic Studies.)2 

Conclusion

Helping older workers attain new skills leading to in-demand jobs will help grow Michigan’s economy. With the layoffs in manufacturing and other sectors, many workers with families are unemployed, under­employed or earning less than what they used to. This results in less tax revenue for the state and less economic stability for the families. Michigan should provide grants that enable working parents to get skilled jobs. It is good workforce development.

Endnotes

  1. Alstadt, D., Earn to Learn: How States Can Reimagine And Reinvest In Work-Study To Help Low-Income Adults Pay For College, Enhance Their Academic Studies, And Prepare For Post-College Careers, The Working Poor Families Project. Washington, DC: 2014. (http://www.workingpoorfamilies.org/wp-content/uploads/2012/03/WPFP-Spring-2014-Brief.pdf, accessed April 18, 2014)
  2. Ibid.

 

 

 

Postsecondary Education Budgets Take Good Steps, But University Tuition Remains Unaffordable

Michigan is taking some small steps toward postsecondary education affordability in the FY 2015 budget by continuing to make a portion of university funding contingent on keeping tuition increases within 3.2% (“tuition restraint”), by adding a performance funding indicator that rewards universities based on enrollment of students with Pell Grants, and by increasing appropriations for financial aid.

Because Michigan does not have a state agency that exercises financing or policy authority over its universities and community colleges, decisions made during the budget process are often designed to force policy changes.

For Fiscal Year 2014-15, funding for the Tuition Incentive Program, a needs-based grant for Medicaid-eligible students, is increased by $1.5 million (3.2%). This grant pays all expenses for an Associate Degree or certificate from a community college, and $2,000 for continuation at a four-year university. Funding for the Tuition Grant, a needs-based grant for attendance at private institutions, is increased by $1.9 million (5.9%). Funding for the Michigan Competitive Scholarship, for which eligibility is based on both merit and need, comes from Michigan’s TANF block grant and remains at the current level.

Community colleges remain affordable in Michigan, but university education is not, due to appropriations decisions over the past 12 years. Since 2002, universities have become increasingly dependent on tuition as the state reduced its support, and as a result, nearly 75% of current university operations funding comes from student tuition and fees, while less than 25% comes from state General Fund appropriations. Most universities doubled their tuition between 2003 and 2013 to make up for the loss in state funding, and Michigan now has the sixth-highest university tuition in the nation while Michigan students hold some of the highest debt. While the 5.9% increase in university appropriations and the 3.2% limit on tuition increases are steps in the right direction, they do not go far enough toward making university tuition affordable.

Community Colleges

Governor’s Budget:

  • Appropriates a 3% ($8.9 million) increase in total funding for community college operations, which is distributed among the 28 Michigan community colleges according to the following metrics: proportional increase from FY 2013-14 funding (50%), weighted completions (17.5%), student contact hours (10%), administrative costs (7.5%) and local strategic value (15%). (Colleges receive the local strategic value portion if they meet four out of five listed best practices in each of the following areas: a) economic development and business/industry partnerships, b) educational partnerships, and c) community services.)
  • As in previous recent years, the majority of overall funding in the governor’s budget for community colleges comes from the School Aid Fund ($197.6 million, an amount equal to the current School Aid Fund appropriation) and the rest comes from the General Fund ($173.9 million, a 26% increase over the current General Fund appropriation).
  • Includes, for the first time, a tuition restraint prerequisite (similar to the one for universities) that conditions receipt of metric funding on limiting FY 2014-15 tuition and fee increases for resident students to 3.2%.

Senate:

  • Concurs with the governor on the increase in operational and performance funding.
  • Appropriates more money from the General Fund ($323.9 million) than the governor, and less from the School Aid Fund ($47.6 million).
  • Does not include the governor’s recommended tuition restraint provision.

House:

  • Concurs with the governor on the increase in operational and performance funding.
  • Concurs with the governor on the amount of funding from the General Fund ($173.9 million) and from the School Aid Fund ($197.6 million).
  • Does not include the governor’s tuition restraint provision.
  • The House Appropriations Committee included boilerplate, supported by the League, and a $100 placeholder to develop a program by which students could obtain a GED at a community college free of charge if committing to enroll in an academic or vocational program. The state would reimburse community colleges for eligible costs associated with providing the GED programs or testing. The boilerplate language and placeholder were removed on the House floor.

Final Budget:

  • Increases community college operations by $8.9 million. Continues to use money from the School Aid Fund for more than half of the total community college funding (operations plus employee retirement system payments), with $167.1 million from the General Fund and $197.6 million from the School Aid Fund.
  • Does not include tuition restraint provision.
  • Does not include House budget language establishing a new program by which students could obtain a GED at a community college free of charge.

Universities

Governor’s Budget:

  • Increases the total appropriation for university operations by $76.9 million (6.1%) over the current fiscal year. As in previous recent years, this increase is in the form of performance funding, though the formula has been modified so that half of the increase goes proportionally to universities to make up for funding lost in 2012.
  • Includes a new performance metric that rewards institutions based on the number of students receiving Pell Grants, a positive change that attempts to encourage universities to become more accessible to low-income students.
  • Continues the practice begun two years ago of requiring universities to limit tuition increases to 3.2% or less in order to receive any performance funding. This “tuition restraint” prerequisite for receiving performance funding helps to keep postsecondary education affordable for low-income students.

Senate:

  • Concurs with the governor in increasing the total appropriation for university operations by $76.9 million (6.1%) over the current fiscal year.
  • Concurs with the governor’s performance funding and tuition restraint changes.

House:

  • Increases university operations funding by $70.4 million (5.6%) over the current fiscal year.
  • Concurs with the governor’s performance funding and tuition restraint changes.

Final Budget:

  • Increases university operations by $74.6 million (5.9%) in performance funding, an amount slightly lower than what was proposed by the governor. Despite the increase, the total General Fund appropriation for universities remains lower than that of all fiscal years from FY 2001 to FY 2011.
  • Includes the governor’s new Pell Grant indicator for performance funding.
  • Maintains the governor’s 3.2% tuition restraint requirement for receiving performance funding.

Financial Aid

Michigan’s three financial aid grants are funded through the Higher Education budget even though students at community colleges and private, not-for-profit institutions are also eligible.

Governor’s Budget:

  • Increases the Tuition Incentive Program by $1.5 million over the current fiscal year, for a total of $48.5 million. The increase is entirely from the General Fund, but $43.8 million (90%) of total funding for TIP is from the state’s TANF funds.
  • Provides total funding for all financial aid grant programs of $103.1 million, some of which comes from the federal Temporary Assistance for Needy Families allocation.
  • Does not increase the Michigan Tuition Grant program, but adds a requirement that independent colleges submit data, including student performance data (Tuition Grant students enrolled in remedial education and/or completing degrees, Pell Grant students completing degrees), to the P-20 system in order to participate in the Tuition Grant program—a change supported by the League.

House:

  • Increases the Tuition Incentive Program by $1.5 million over current year, and the Michigan Tuition Grant by $1.8 million over the current year.
  • Includes the governor’s P-20 data reporting requirement for participation in the Tuition Grant program.

Senate:

  • Increases the Tuition Incentive Program by $1.5 million over current year.
  • Does not increase the Michigan Tuition Grant. Requires only that participating independent colleges submit data on students receiving the Tuition Grant, instead of including the governor’s proposed requirement that they submit data on all students.

Final Budget:

  • Increases funding for the Tuition Incentive Program by $1.5 million (3.2%) to a total of $48.5 million, 90% of which is paid out of Michigan’s TANF block grant.
  • Increases funding for the Michigan Tuition Grant by $1.9 million (5.9%) and includes the Senate’s data reporting requirement rather than that proposed by the governor. Complete data reporting to Michigan’s P-20 longitudinal data system is crucial for evaluating strategies to help at-risk and low-income students, so it is hoped that the governor’s requirement will be in the final budget next year.
  • Maintains $18.4 million in funding for the Michigan Competitive Scholarship, which is merit-based as well as need-based. Although it is awarded to students who are not low-income as well as to those who are, all of this funding comes from Michigan’s TANF block grant.

The House and Senate Approve Modest Increases for Universities and Community Colleges for FY 2015

Full report in PDF

Because Michigan does not have a state agency that exercises financing or policy authority over its universities and community colleges, the Legislature makes direct appropriations to those institutions through the Higher Education and Community Colleges budgets. Michigan’s three financial aid grant programs are funded through the Higher Education budget even though community college students may also apply for and receive those grants.

Community Colleges

Governor’s Budget:

  • Appropriates a 3% ($8.9 million) increase in total funding for community college operations, which is distributed among the 28 Michigan community colleges according to the following metrics: proportional increase from FY 2013-14 funding (50%), weighted completions (17.5%), student contact hours (10%), administrative costs (7.5%) and local strategic value (15%). (Colleges receive the local strategic value portion if they meet four out of five listed best practices in each of the following areas: a) economic development and business/industry partnerships, b) educational partnerships, and c) community services.)
  • As in previous recent years, the majority of overall funding in the governor’s budget for community colleges comes from the School Aid Fund ($197.6 million, an amount equal to the current School Aid Fund appropriation) and the rest comes from the General Fund ($173.9 million, a 26% increase over the current General Fund appropriation).
  • Includes, for the first time, a tuition restraint prerequisite (similar to the one for universities) that conditions receipt of metric funding on limiting FY 2014-15 tuition and fee increases for resident students to 3.2%.

Senate:

  • Concurs with the governor on the increase in operational and performance funding.
  • Appropriates more money from the General Fund ($323.9 million) than the governor, and less from the School Aid Fund ($47.6 million).
  • Does not include the governor’s recommended tuition restraint provision.

House:

  • Concurs with the governor on the increase in operational and performance funding.
  • Concurs with the governor on the amount of funding from the General Fund ($173.9 million) and from the School Aid Fund ($197.6 million).
  • Does not include the governor’s tuition restraint provision.
  • The House Appropriations Committee included boilerplate, supported by the League, and a $100 placeholder to develop a program by which students could obtain a GED at a community college free of charge if committing to enroll in an academic or vocational program. The state would reimburse community colleges for eligible costs associated with providing the GED programs or testing. The boilerplate language and placeholder were removed on the House floor.

Universities

Governor’s Budget:

  • Increases the total appropriation for university operations by $76.9 million (6.1%) over the current fiscal year. As in previous recent years, this increase is in the form of performance funding, though the formula has been modified so that half of the increase goes proportionally to universities to make up for funding lost in 2012.
  • Includes a new performance metric that rewards institutions based on the number of students receiving Pell Grants, a positive change that attempts to encourage universities to become more accessible to low-income students.
  • Continues the practice begun two years ago of requiring universities to limit tuition increases to 3.2% or less in order to receive any performance funding. This is the first budget that applies the same requirement to community colleges as well, even though community college tuition increases have been much smaller than those of universities over the past decade. This “tuition restraint” prerequisite for receiving performance funding helps to keep postsecondary education affordable for low-income students.

Senate:

  • Concurs with the governor in increasing the total appropriation for university operations by $76.9 million (6.1%) over the current fiscal year.
  • Concurs with the governor’s performance funding and tuition restraint changes.

House:

  • Increases university operations funding by $70.4 million (5.6%) over the current fiscal year.
  • Concurs with the governor’s performance funding and tuition restraint changes.

Financial Aid

Governor’s Budget:

  • Increases the Tuition Incentive Program by $1.5 million over the current fiscal year, for a total of $48.5 million. The increase is entirely from the General Fund, but $43.8 million (90%) of total funding for TIP is from the state’s TANF funds.
  • Provides total funding for all financial aid grant programs of $103.1 million, some of which comes from the federal Temporary Assistance for Needy Families allocation.
  • Does not increase the Michigan Tuition Grant program, but adds a requirement that independent colleges submit data, including student performance data (Tuition Grant students enrolled in remedial education and/or completing degrees, Pell Grant students completing degrees), to the P-20 system in order to participate in the Tuition Grant program—a change supported by the League.

House:

  • Increases the Tuition Incentive Program by $1.5 million over current year, and the Michigan Tuition Grant by $1.8 million over the current year.
  • Includes the governor’s P-20 data reporting requirement for participation in the Tuition Grant program.

Senate:

  • Increases the Tuition Incentive Program by $1.5 million over current year.
  • Does not increase the Michigan Tuition Grant or include the governor’s P-20 requirement for participation in the Tuition Grant program.

A silver lining, but for how long?

A Detroit Free Press article this week discusses how, despite rising tuition, Michigan’s universities have recently reduced costs for students. The article measures “net cost,” which takes into account tuition and related expenses, and the offsets of these expenses from financial aid. (more…)

Let’s keep it affordable for our state’s sake

College tuition has doubled in the past decade, student debt is becoming unmanageable, and students with limited income have less grant aid available than before. That is not a winning prescription for making sure Michigan’s workers have the skills to compete in the 21st century economy.

As shown in a new Michigan League for Public Policy report, Keeping It Affordable in Michigan, Michigan used to have up to eight state-funded need-based grant programs, but now has only three. Two of the remaining grants, the Michigan Competitive Scholarship and the Michigan Tuition Grant, have reduced their maximum awards and the number of students awarded. (more…)