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More aid for Michigan college students? Business groups push $360 million plan

graduation hat
A plan backed by Michigan business groups would provide more state money to new college students. (Shutterstock)

Prominent Michigan business networks groups are throwing their support behind a huge expansion of state-funded scholarships for incoming college students.

In a recent letter, the groups came out in support of the Michigan Achievement Scholarship program, a GOP effort that would give as much as $6,000 to students attending Michigan public or private four-year colleges and universities. The proposal is part of the Senate’s education budget proposal for the 2022-23 fiscal year. 

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Along with the scholarship funds for four-year college students, the proposed program would provide up to $3,000 a year for students attending a Michigan community, tribal college or a qualified private training institution. 

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Only students who graduated high school in 2022 or later would qualify for funding, and the tuition aid is dependent on household income.

Students must enroll in college or university full-time and complete the Free Application for Federal Student Aid (FAFSA) form. They would be eligible if their expected family contribution is $25,000 a year or less. 

The Michigan Achievement Scholarship program would be a last-dollar grant, meaning students would get the funding only after all other financial aid resources are applied.

Michigan is behind other states when it comes to the rate of people earning bachelor degrees or higher. Nationally, 33.1 percent of adults have a bachelor degree or higher, compared to 30 percent in Michigan, according to 2019 census data.

Gov. Gretchen Whitmer wants to increase the rate of working adults with a skills certificate, associate degree, bachelor’s degree or higher from 49 percent to 60 percent by 2030. As of 2020, 49.1 percent of adults met that bar, compared to a national average of 50.9 percent.

Income generally increases with education. According to state data, the average Michigan resident with a high school diploma, five years after graduation, earned $19,800 in 2021, compared to $39,600 for those five years out from earning an associate’s degree, and $52,900 for those with a bachelor’s degree.

That extra income not only helps individual families, but the state, too, in extra income taxes – the more residents earn, the more taxes they pay, the more potholes can be filled.

More college grads also helps Michigan businesses that are struggling to fill high-skill jobs, and helps the state attract new businesses.

Among the 17 business groups that joined to push for the additional scholarship funding are six chambers of commerce, including those representing Grand Rapids, Lansing and Southwest Michigan, in addition to the statewide Michigan Chamber of Commerce.

“Michigan faces a current workforce and talent shortage in many high-skill/high-demand careers,” the letter written by the coalition said. 

The goal of the Senate-proposed scholarship program is to provide incentives to students to complete their secondary education at public schools in Michigan to counteract the state’s declining enrollment numbers at most public Universities and to retain college-educated talent to work for Michigan businesses.

“We've seen the effects of COVID in enrollment so it makes a ton of sense for our legislature to invest this money … to make a difference for the economy of our state,” Ryan Fewins-Bliss, the executive director of the Michigan College Access Network, told Bridge Michigan. “Businesses are the leading voice to tell us what's happening in the economy and we should listen to what they're saying here.”

According to a 2018 survey conducted by the Michigan Association of State Universities, 78.8 percent of Michigan residents support an increase of state funding to make college more affordable and 46.2 percent of Michigan residents see cost as the biggest barrier to secondary education. 

The cost of university tuition and fees at several public state universities has increased by over 200 percent from 2001-2002 to 2021-2022, according to the Michigan Higher Education Institutional Data Inventory. During the same timespan, the state tuition aid fund decreased by 18.45 percent, from $1.615 billion in 2001-2002 according to the 2018 survey to $1.317 billion in 2021-2022 (not accounting for inflation). 

“I hope and anticipate that affirmation of support by the state's business community will have a very positive impact on current legislative and gubernatorial deliberations on the financial aid program and will ultimately increases its chances of being included in the state budget,” Dan Hurley, CEO of MASU, told Bridge.

“There's a huge historic labor market demand in the state for individuals with four-year degrees and above and I think that this scholarship program, obviously, would make a huge impact in college affordability,” Hurley said.

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“It would make a strong impact on increasing enrollment, which we desperately need in Michigan's colleges and universities, and it would send a very strong message to employers that we are serious as a state about retaining and growing our current employers and recruiting companies to Michigan.”

The business networks are hopeful that the program would also incentivize more people to work in the state after graduating and help create a more educated workforce. 

“We want Michigan to continue to aim to be a Top-10 State for developing talent and attracting and retaining talent,” the news release said. “In addition, we want Michigan to be a place for businesses to be proud to make their home. We believe the Michigan Achievement Scholarship funding … will help accomplish this.”

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