"Any recent college graduate knows that it is impossible to go to school without government funds!"

These words summarize the views of college students heard in several recent interactions related to a decision by Gov. Jennifer Granholm to eliminate the $140 million state "Promise Scholarship" as a budget-cutting measure.

The program was the latest version of one created by Gov. John Engler in 1997 using revenue from the tobacco lawsuit settlement. The program awarded $4,000 to high school students who achieve a proficient score on the Michigan Merit Exam and then maintain a 2.5 GPA in their first two years at a Michigan college.  Needless to say, the outcry was swift. (It's basically summarized as follows: "Gov. Granholm hates children").

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Are these college students right? Is it impossible for young people from middle class families to attend college without government money? It's not easy, but several examples demonstrate that it is not impossible.

For example Grove City College in Pennsylvania (my alma mater, in the spirit of full disclosure) and Michigan's own Hillsdale College are two schools that accept no government financial aid whatsoever. In fact, students who attend them are not allowed to even get student loans from the state or federal governments, because doing so would subject the schools to a plethora of regulations and mandates to which they object. Instead, the schools provide private loans to students through a partnership with a private bank. Despite the lack of government backing, GCC's combined annual tuition and room and board is under $20,000 — relatively modest by current (inflated) standards, and average tuitions at both schools have risen much more slowly than the vast majority of state universities.

Studies have shown that government increases in government higher education funding and aid paradoxically often lead to increases in costs charged to students. Michael Van Beek, our director of education policy, explains regarding the scholarship, "It is no coincidence that, as these tuition assistance programs have grown over the last decade, tuition costs have skyrocketed."

Clearly many middle-class and lower income students need aid to school, but the two private colleges discussed here meet this need through private funding.

It is unlikely that government funding will be cut out of higher education anytime soon, which means the cost will likely continue to increase well beyond the rate of inflation.

Perhaps more of that funding should be directed towards economics classes.


Jarrett Skorup is the research associate for online engagement for Michigan Capitol Confidential at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.