Budget Provides ‘Community College Guarantee’ For High School Class Of ’24

Michigan’s latest class of high school graduates can access free community college, regardless of their household’s income level, through the updated Michigan Achievement Scholarship that was part of the Fiscal Year (FY) 2025 budget. 

“If you graduated from high school for the class of 2024, if you completed your (Free Application for Federal Student Aid) and you enroll full-time, those are the eligibility requirements. There’s not an income threshold,” said Brandy Johnson, president of the Michigan Community College Association (MCCA), to MIRS. “About 80 percent of high school students live within a community college district where they have access to a community college – for those students, it’s a tuition-free pathway.” 

Near the end of June, a $23.4 billion education omnibus budget – containing PreK-12, public university and community college appropriations – passed by a party-line in both the Senate and House.

Around 4:58 a.m. on June 27, after the Senate approved the education omnibus budget, Senate Appropriations Chair Sarah Anthony (D-Lansing) described its “Community College Guarantee” as a dream she had during her 10 years of working with the MCCA. 

“The fact that because of this budget, men and women and a whole bunch of young people across the state of Michigan will be able to go to our colleges tuition-free, that is something that we can celebrate regardless of your political party or where you live in the state of Michigan,” Anthony said. 

The education budget agreement, HB 5507, updates the Michigan Achievement Scholarship with a 10 percent funding increase, creating a total investment of $330 million for the upcoming FY ’25. The scholarship program first became available to students who obtained a diploma or high school equivalency certificate in 2023, and students must have resided in the state since July 1 of the prior calendar year.

The money comes from a General Fund deposit into the “Post Secondary Scholarship Fund,” and ultimately represents around 17 percent of all General Fund spending in the education omnibus budget. 

Spring 2023 graduates could access up to $2,750 annually for a community or tribal college program, specifically if their Free Application for Federal Student Aid (FAFSA) completion revealed them having an expected family contribution of $25,000 or less. 

Under HB 5507, high school seniors will still need to complete their FAFSA, but determinations surrounding their financial needs will not affect their eligibility. Moreover, the $2,750 yearly cap on the scholarship will be eliminated. 

The most immediate access to free community college will be for students residing in a community college district, where local tax millages support the college’s operations. If a student wants to attend a community college that’s not in-district, the Michigan Achievement Scholarship could cover the cost of in-district tuition. Johnson said about 80 percent of high schoolers reside in a community college district. 

Arenac County – which has fewer than 15,100 residents – is not part of a community college district. If a student from the county wants to attend community college, they could attend the Mid-Michigan College where the out-district tuition rate is $258 per contact hour (compared to $155 for in-district enrollees). 

They could also choose Delta College, where the out-district cost is $224 per contact hour, compared to $133 per contact hour for in-district enrollees. 

However, Johnson said things like federal Pell Grants, which provide need-based grants to low-income students, could expand the impact of the Michigan scholarship for out-district students. 

Johnson illustrated how, if the student is attending a community college with an out-district rate of $6,000 and an in-district rate of $3,000 annually, the Michigan scholarship could still make up the difference if the student receives a $4,000 federal Pell Grant. 

“Really, the sort of beauty of the design of the program is the one clear statement that for all students (they) do three things: graduate high school, complete a FAFSA, enroll full-time,” Johnson said. “That’s the real beauty of the design of the guarantee, because it’s a really simple and clear message.” 

The community college proponent of the Michigan Achievement Scholarship has been titled the “Community College Guarantee,” and it can serve as a last-dollar scholarship for students who receive Pell Grants and other non-loan forms of financial assistance. 

Moreover, for low-income students who receive a Pell Grant, the Community College Guarantee will provide a $1,000 payment, coming in the form of a refund check issued by the college itself once the state credits it to a student account. 

When asked what the $1,000 could be spent on, Johnson said “textbooks, technology and transportation are three that come to mind.” 

“Also equipment … so students that are in healthcare programs, for example, are often expected to buy a stethoscope or scrubs, or people in welding programs need to buy special boots as part of their programs … these are like additional costs that sometimes you don’t think of as costs of college,” she said, explaining earlier that “maybe they want to use it to buy a laptop or a hot spot. Maybe they just use it for a bus pass or for putting gas in their car and a parking pass … but those non-tuition costs of attendance are so important.” 

As of May, 7,337 community college students total have been awarded a Michigan Achievement Scholarship, as well as 3,668 private college students and 17,463 public university enrollees. 

According to the state’s dashboard on the program, public universities have seen $83.3 million in scholarship bucks, private institutions have seen more than $13.1 million and $12.3 million is circulating within community colleges. 

In terms of why students were not awarded a scholarship in the 2023-24 academic year to date, the dashboard provided that 71.15 percent were not enrolled and 21.07 percent were fewer than full-time students. 

As for federal Pell Grants, a Jan. 28 report by the Education Data Initiative, 51 percent of Pell Grant funds in the United States go to students from families earning less than $20,000 annually, and in Michigan, 194,896 Pell Grant recipients earned an average grant of $4,686. 

 Additionally, MIRS spoke with Sen. Sean McCann (D-Kalamazoo) Tuesday, chair of the Senate Appropriations Subcommittee on Universities and Community Colleges. McCann highlighted how Michigan is “only going to be in year two” of the scholarship program this fall,” but he believes the program is robustly funded and very stable. 

Another addition made to the program is increasing the amount that independent college students can receive from $4,000 to $5,500 annually, establishing parity between private college enrollees and public university students. 

“We’re hopeful that the achievement scholarship increases enrollments,” McCann said, discussing how demographics have become one of colleges and universities’ biggest challenges. “You’re faced with a limited supply of students potentially enrolling, driven by demographics largely, and then the next factor that weighs on that is a very strong economy with low employment. 

“And so there’s a lot of pressure and incentive, it would seem, for people to enter the workforce even without an associate’s or a four-year degree, but I rush to stress the overwhelming evidence that suggests the (long-term) return on investment of a higher education degree,” he said. “Four-year or two-year, that is going to impact people’s lives and careers more positively than if they sort of jump into the workforce and don’t get that extra education under their belt.” 

Daniel Hurley, the chief executive officer of the Michigan Association of State Universities (MASU), said his organization does believe the scholarship program has had a meaningful impact on public universities’ enrollment. 

For instance, he said for fall 2023, there was a modest overall student headcount increase of about 0.5 percent, representing the first boost in overall headcount since 2012. He added that the presence of freshmen entering university full-time grew by 3.9 percent last fall. 

However, Hurley remains cautious about what the Community College Guarantee and the $1,000 stipends could mean for public universities’ enrollment numbers. 

“There may be some prospective migration – students who would plan on going to, say, a regional public university who may end up going to a community college,” Hurley said. “I think that given the fact that this just took place, there hasn’t been any major announcements or marketing, I think the enrollment impacts could be quite minimal this fall, but in the coming years, that may be a factor.” 

‘Hidden Gems’ In Higher Ed, Community College Spending 

In terms of community college or higher education spending items for FY ’25, which McCann or Johnson considered to be “hidden gems” or points of note in the budget, they listed: 

– A $10 million School Aid Fund deposit to significantly pay off the debt – or unfunded liability – of seven universities in the Michigan Public School Employees’ Retirement System. The universities consist of Central Michigan, Eastern Michigan, Ferris State, Lake Superior State, Michigan Tech, Northern Michigan and Western Michigan universities. 

According to the House Fiscal Agency (HFA), the payment is “anticipated to address the current estimated remaining (unfunded actuarial accrued liability) balance.” 

– Not mentioned in MIRS‘ interviews with McCann and Johnson, is a 42.9 percent increase – or a $600,000 funding boost – for the Children of Veterans and Officers Survivor Tuition Grant programs, which deliver tuition grants to the children of deceased or permanently disabled military veterans. 

The grants are also available to the surviving spouses and children of firefighters and Michigan police officers “killed in the line of duty.” According to the HFA, total funding for the programs will be $2 million from the General Fund. 

– $980,000 from the General Fund for a FAFSA completion incentive. McCann said the contest has not been fully shaped yet, but it could include first-time FAFSA completers being randomly drawn for cash awards of up to $5,000. 

“We’re going to put some real juice behind an incentive for kids to complete their FAFSAs,” he said. “I don’t have all the contours of it worked out yet, but that’s something that we hope is going to (make) a big splash.” 

– $1 million one-time in the budget for the Michigan Department of Lifelong Education, Advancement and Potential for “Michigan Transfer Pathways,” which will be a program dedicated to assisting higher education institutions with the transfer of students and acceptance of credits. 

The program will work with the new $1.2 million Michigan Transfer Network, which will have two full-time job posts overseeing FAFSA completion efforts, state-administered scholarships and student loan information. 

– $500,000 to the MCCA to administer a “Local Heroes Program” to promote college dual enrollment for high schoolers interested in becoming public safety, education and health care professionals. 

– $500,000 for a one-year “Hunger-Free Campus” pilot program at Michigan State and Northern Michigan universities, as well as Macomb and Grand Rapids community colleges, to combat campus hunger through establishing campus food pantries, meal plan credit donations and other ideas. 

Article courtesy MIRS News for SBAM’s Lansing Watchdog e-newsletter