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Budget Brief JPG USE THIS ONEpdficonWith the 2017 state budget expected to be wrapped up by the end of May, the League continues to push for a strong postsecondary education system that enables low-paid workers to increase their marketable skills while working and taking care of their families. The League supports financial aid for low-paid workers with families who are trying to acquire occupational skills and have been out of high school for more than 10 years, stronger tuition restraints for public universities coupled with additional funding, and increased investments in adult education (School Aid budget). Inadequate access to adult education negatively affects community colleges, because many students needing remediation will be required to take developmental education at the colleges rather than beginning their occupational training programs college-ready.
BB Budget funding for adult educationVersions of the 2017 Community Colleges and Higher Education budgets have already been passed separately by the House and Senate. At the Consensus Revenue Estimating Conference on May 17th, lawmakers will get an update from state budget experts and economists on state revenues that will inform the final budget spending targets. The Legislature is looking to complete the 2017 budget and send it to the governor by the end of May. Differences between the House and Senate budgets will be negotiated in joint conference committees, which will begin meeting soon after the May 17th conference.
This report examines the differences in postsecondary education and training in the budgets that were approved by the House and Senate and the primary decisions that will need to be made before the budget is finalized.

Financial Aid

Tuition Incentive Program: The governor’s Higher Education budget recommended $2 million in new funding for the Tuition Incentive Program (TIP), which serves students from households that are eligible for Medicaid, bringing the total funding for the program to $50.5 million.

  • Both the House and Senate agreed with the governor’s recommendation to add $2 million for the TIP.

The League supports the increase in funding for the TIP, as it is specifically targeted to students from low-income households.
Part-Time Independent Student Grant: Neither the Community Colleges budget nor the Higher Education budget proposed by the governor for 2017 included funding for the Part-Time Independent Student Grant, which serves individuals who have been out of high school for more than 10 years and/or are over 30 years of age. This grant had been included in the 2016 Community Colleges budget, but was cut from the final budget in conference committee. The failure to include funding for the grant in 2017 means that the upcoming school year will be the seventh year in a row that there is no state financial aid to help this population attend a community college or public university.

  • Neither the House nor the Senate added funding for the Part-Time Independent Student Grant.

The League supports funding for the Part-Time Independent Student Grant to help older students in either the Community Colleges or Higher Education budget.
Other Financial Aid Programs: There are two other grant programs in the Higher Education budget, both of which are means-tested based on the amount a family needs to meet tuition levels rather than on the family’s income. The Michigan Tuition Grant helps students attend private not-for-profit institutions and the Student Competitive Scholarship is based on both merit and need. The governor did not recommend increases for either of these grants.

  • Senate: The Senate added $404,000 for the State Competitive Scholarship and $748,800 for the Michigan Tuition Grant.
  • House: The House agreed with the governor’s recommendation to not add funding for the State Competitive Scholarship and adds $1,157,200 for the Michigan Tuition Grant.

The League supports keeping these two financial aid programs strong, as they are accessible to students from low-income families in addition to those from financially secure families.

Tuition Restraint

Tuition restraint is a limit on the amount a university may increase tuition and fees annually and still receive full funding from the state. The governor recommended increasing the cap from 3.2% to 4.8%, enabling universities to increase tuition and fees by a higher percentage than has been allowable in the past several years.

  • Senate: The Senate agreed with the governor’s recommendation to increase the cap from 3.2% to 4.8%, and added language that universities that exceed the cap will also not receive capital outlay funds (for school construction projects) in the 2018 or 2019 budget years.
  • House: The House agreed with the governor’s recommendation to increase the cap from 3.2% to 4.8% and added “or $500, whichever is greater” to the bill language.

The League supports tuition restraint as an attempt to keep tuition from rising too quickly, but prefers that Michigan undertake other strategies to actually bring tuition down and reduce student debt. Because much of the cost burden of supporting public universities has been shifted from the state to students, reducing tuition can only be done if the state restores the university funding that has been cut over the past decade.

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