World Class Colleges, Sluggish Financial Aid

(Originally posted in the Michigan League for Public Policy blog)

By Peter Ruark

It is a point of pride among Michiganians that we have great public universities and private colleges.

We have two Top Ten universities that are friendly rivals, and high-quality regional universities. In addition to providing an excellent education for Michigan residents, our universities attract respected scholars and cream-of-the crop students from all over the world. We have a number of widely respected private colleges as well.

So why does Michigan lag behind most other Midwestern states and much of the country in providing financial aid that makes such great education affordable?

Per capita, Michigan spends $194 on need-based financial aid grants per undergraduate student — lower than every other Midwest state except Ohio, and is only one-quarter what Indiana and Illinois spend.

According to the Project on Student Debt, in 2011-2012, Michigan private 4-year college graduates owed an average of $32,672 in student debt, 74% more than similar graduates owed in 2003-2004. For public university graduates, it was $28,147, a 50% jump during the same period.

Having highly skilled people in our state is great for business and the economy, but when our graduates spend years paying off debt, it takes a little of the blush off the bloom. High college debt limits the upward mobility of those graduates and restricts the money they can spend in their communities. At worst, it can contribute to severe financial difficulty.

Michigan needs to make the affordability of education as high of a priority as the quality and prestige of our institutions:

  • The Michigan Competitive Scholarship pays a maximum of only $676 per academic year at a Michigan public college or university, and $1,524 per academic year at a Michigan private not-for-profit college. Let’s raise that amount to address tuition realities.
  • The three existing grant programs do not serve older students who have been out of high school for many years. Let’s renew the two grant programs that were cut in 2009 that served such students.
  • Work-Study that connects less privileged students with work related to their majors can provide experience and financial aid concurrently. Let’s explore ways to make such a program available in Michigan.

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