Gross Appropriation

Appropriation Breakdown




Grants and Financial Aid


$5,149,700 from Federal Funds;



$115,811,680 from GF/GP

Program Description:

The Grants and Financial Aid Division conducts, among others, the following programs--all of which should be eliminated:

·         The Tuition Grant Program, which awards grants to financially needy students attending private, independent colleges within Michigan.

·         The Grant for Indian Tuition Waivers Program, which funds, in its entirety, the education of Native American residents, should the student choose to attend a Michigan public college or university. In order to qualify for the program, one must be at least 1/4 Native American.

·         The Tuition Incentive Program (TIP), which reimburses tuition and mandatory fees to community colleges, public universities, independent non-profit degree granting colleges or universities, or Michigan tribally controlled community colleges for associate degree or certificate programs. The payments shall not exceed an amount equal to the average current in-district resident community college rate with a different amount for university participants. In order to be eligible for TIP, a student must meet all of the following categories: (1) the student must be a resident of Michigan; (2) the student's family's income is or was at the poverty level within the preceding year; (3) the student was under 20 at the time of graduation or GED completion; (4) the student graduated from high school not more than 4 years before application.

·         The Grant for Michigan Resident Dental Graduates Program, which subsidizes the education of dental students at the University of Detroit-Mercy via grants and loans.

·         The Part-time Independent Student Program, which provides need-based grants of up to $600 a year to part-time students attending Michigan's public universities.

·         The Michigan Education Opportunity Grant Program, which assists financially needy undergraduates who are enrolled at least half-time at a Michigan community college or public college or university.

·         The Grant for Allied Health Graduates Program, which awards grants to private independent colleges within Michigan that have health and nursing degree programs. The size of the grant is dependent upon the number of Michigan residents who graduate from these programs within a given year.

·         The Paul Douglas Teacher Scholarship Program, which awards grants to students pursuing education degrees at Michigan colleges and universities.

Recommended Action:

These grants should be eliminated, producing a savings of $77,898,458. These programs take money from students and parents through taxes, pass it through the administrative bureaucracies of the many grant programs, and return it to students--less the costs of collection and administration overhead. State subsidies also drive up the costs of higher education. The state of Michigan should adopt a policy that encourages students to rely on their families, themselves, private foundations and scholarships, and private business grants and loans to fund their education. Students should be independent of the state for financing their educational needs, just as they should be for their food, clothing and shelter.


Gross Appropriation

Appropriation Breakdown




Public University


All from GF/GP




Program Description:

Michigan's 13 public four-year universities are located throughout the state. Eight institutions and the two branch campuses are located in metropolitan areas of southern Michigan. Two institutions are in the central part of the Lower Peninsula and three are located in the Upper Peninsula. Currently, about 259,000 full-time students attend Michigan's public universities.

Three of these institutions--the University of Michigan in Ann Arbor, Michigan State University, and Wayne State University--have large undergraduate, graduate and professional programs. Five institutions--Western Michigan University, Eastern Michigan University, Central Michigan University, Oakland University, and Northern Michigan University--offer primarily undergraduate programs, but also offer some graduate programs. Programs in specialized areas are emphasized at two institutions: Michigan Technological University, which offers primarily engineering courses; and Ferris State University, which offers primarily vocational and technical programs. Three institutions, as well as the University of Michigan's two branch campuses in Flint and Dearborn, offer primarily undergraduate liberal arts programs; they are: Grand Valley State University, Saginaw Valley State University, and Lake Superior State University.

For fiscal year 1995-96, Public University Operations funds will be allocated as follows:

Central Michigan University


Eastern Michigan University


Ferris State University


Grand Valley State University


Lake Superior State University


Michigan State University


Michigan Technological University


Northern Michigan University


Oakland University


Saginaw Valley State University


University of Michigan - Ann Arbor


University of Michigan – Dearborn


University of Michigan – Flint


Wayne State University


Western Michigan University


Recommended Action:

Although the direction of higher education funding should be toward using tuition vouchers or tax credits to replace direct state grants to public universities, such changes are not politically feasible at the moment. Such a move will provide greater incentives for universities to control growing costs, a problem that the state legislature should take more immediate steps to address.

Between fiscal year 1984-1985 and fiscal year 1994-95 public university full time student enrollment increased by approximately 14.1%--from approximately 226,000 to 258,000. At the same time, spending grew by approximately 57.1%--from $759,750,000 to $1,193,792,577.[86] Thus, spending increased more than 4 times as fast as did enrollment--a staggering figure.

Clearly, over the last decade, spending has risen at a disproportionately high rate. This needs to change; and a good way to do this would be to retroactively index spending.

Using fiscal year 1984-85 as the base year, we would index spending to enrollment and inflation, which rose by approximately 14.1% and 41% respectively during the period 1984 1995: $759,750,000 * (1+ 0.141+ 0.41), which would yield a total of $1,178,372,250. Thus, using this formula--which, by any measure, one would have to regard as equitable--the Michigan taxpayer would reap a savings of $64,295,609, as spending for fiscal year 1995-96 would be decreased from $1,242,667,859 to the indexed total of $1,178,372,250.

Proponents of these dramatic spending increases argue that a simple analysis based on enrollment and inflation ignores such factors as the cyclical nature of enrollment, the impact of increased program demands, and the increased costs of technology. While these factors certainly affect funding needs, it is interesting that they always seem to drive overall costs upward. Where are the savings from better technology in college operations and administration? Why does funding continue to increased even when enrollment declines? While a enrollment/inflation index may be simple (and can certainly be improved upon by a more detailed analysis), so is the argument that these institutions always require funding increases. Until the fiscal discipline of a market system operates to contain costs in our education systems, Legislators and citizens should place high burden of proof on public universities to justify demands for increased funding.