More need-based grant funding pushed for college

Kim Kozlowski
The Detroit News

Inside the Don Bosco Hall Community Resource Center on Detroit’s west side, representatives from Michigan State University, Henry Ford College and other higher education institutions sat behind tables, poised to sell their colleges to city high school students.

They passed out brochures, gave admissions tips and talked about how to finance higher education — among the biggest barriers for students.

Many talked about working during the summer or winning scholarships, but an effort is also underway to increase state support for low-income students to help mitigate college costs.

The first concerted campaign to boost state grant funding in years, it comes as college tuition continues to increase, student loan debt has reached historic levels and states like Michigan have ramped up efforts to build highly educated and skilled workforces.

Coming up with a way to pay for an education is the first step for many students to enroll in college, and stay there.

“Some kids don’t have enough money to go to school,” said Makayla Williams, a student at WAY Academy, a charter school on Detroit’s west side. “There are a lot of kids who want to go to college but can’t afford it.”

That’s why the Michigan Association of State Universities has spearheaded the effort to boost state funding for need-based grants, which was slashed during the Great Recession and is slowly rebounding.

Advocates say increasing grants will help lower-income students by making college affordable for them and boost Michigan’s economy by giving the state a bigger pool of highly skilled workers.

“We need to facilitate college access for populations not entering and succeeding in college, and that includes individuals from low-income backgrounds,” said Dan Hurley, executive director of the Michigan Association of State Universities. “It’s an equity issue but also an economic issue.”

Lobbying for more funding for students with financial need is part of the association’s first public policy agenda. Ideas include boosting state operating funds for Michigan’s 15 public universities and increasing the share of financial aid that’s targeted to students at public schools, which tend to cost less.

The drop in need-based grant funding over the past 15 years has been accompanied by decreases in state funding for Michigan’s 15 public universities. As a result, those schools have hiked tuition to keep up with rising costs.

In Michigan, tuition and fees for in-state students at public four-year institutions averaged nearly $12,000 in 2015-16, according to the College Board. That is nearly three times more than in 2000-01, when tuition averaged less than $4,500, a report from the House Fiscal Agency shows.

Meanwhile, student loan debt has continued rising: Michigan ranked in the top 10 in the nation, with an average debt of $29,450 for students graduating in 2014 from public and private four-year institutions, according to the Institute for College Access and Success. That’s up from $18,754 in 2004.

A recent action plan for Michigan, created by a cross section of leaders, aims for 60 percent of the state’s working-age residents to have at least an associate degree by 2025.

Census figures from 2013 show just 38 percent have an associate degree or higher, ranking Michigan below the national average of 40 percent.

In response to higher college costs and debt loads, many states have developed policies to help more students reach their educational attainment goals, and that includes offering more financial aid to students in need, said Dustin Weeden, senior policy specialist at the National Conference of State Legislatures.

“Financial restrictions are why many students choose not to enroll or complete a college education,” Weeden said. “If you target aid to students who need it, that will get a state further along to meet their goal.”

According to a report from the Brown Center on Education Policy at Brookings and other research, states seeking the largest return on taxpayers’ investment should target dollars for students with potential and financial need, since their success is often hampered by financial constraints.

That’s why Hurley sees increasing need-based support as part of a vital strategy to increase access to higher education. “It’s most important to drive fiscal resources into the hands of those who need it the most, who are most dependent on whether they are even going to go in the first place,” he said.

Since the 1960s, the state has invested in grants for students with financial needs, according to Anne Wohlfert, director of the Michigan Student Financial Services Bureau. But the budget was cut dramatically in two of the state’s flagship financial aid programs during 2010, and has not fully recovered.

The Michigan Competitive Scholarship was slashed from $32.6 million to $14.7 million and the Michigan Tuition Grant program was trimmed from $56.7 million to $31.7 million.

“Financial aid programs are hurting,” Wohlfert said. “Even when we had the full funding, there was never enough money to fund all the students who need it. Now there is even less funding.”

The Michigan Association of State Universities maintains the situation is even more dire that it first appears: Need-based grants were already declining before the 2010 cuts.

Funding for those programs has fallen since 2002, when it was $123.6 million, according to Bob Murphy, the organization’s university relations director and a former higher education analyst with the State Budget Office. For fiscal year 2016, the state is spending $105.5 million on need-based grants.

Gov. Rick Snyder recently unveiled a budget for fiscal year 2017 that proposes a 4.3 percent increase in funding for public universities, or an additional $61.2 million, for a total of $1.5 billion.

Within that budget is a proposed $107.5 million for need-based grants, a nominal increase from this year. The funds are earmarked for students who attend public institutions, as well as private colleges.

When inflation is factored in, need-based state grant funding this year is about $60 million lower than was in 2002, or 35 percent less.

“The idea,” Murphy said, “is to resurrect or at least drive more resources into Michigan’s (need-based) grant programs.”