Two-thirds of low-income students miss out on Michigan financial aid program

The university's main library
Michigan State University main library | Michael Gerstein

Only one-third of the over 400,000 eligible undergraduates in Michigan are actually receiving college grants available to them from the state’s largest financial aid program.

Removing existing barriers and increasing eligibility for low-income students are the primary recommendations outlined in a new report released today by the Century Foundation, a New York City-based progressive think tank. 

The report, “Michigan’s Tuition Incentive Program: A Model for National Need-Based Financial Aid,” outlines ways that the state’s largest college tuition grant program has succeeded, but also suggests ways it can be updated to better serve students. 

Catherine Brown, one of the report’s authors, said it’s important for institutions and colleges to ensure that students don’t have to “jump through any hoops and they aren’t prevented from getting this benefit for any reason.”

The study notes some barriers have increased during the COVID-19 pandemic. 

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“With community colleges and low-income students in general right now, we’ve seen a significant dip in college enrollment,” said Brown. “This is the time to provide more flexibility… for this population because otherwise there’s a risk that they won’t go to college or they won’t go back to college and get that degree. So we see these situations as particularly urgent.”

Michigan’s TIP is a needs-based grant that is awarded to low-income students who are eligible by previously having been enrolled in Medicaid. It is able to be applied on top of Pell grants and can be used by students enrolling in community college, four-year or private universities. For those enrolling in community college, full tuition is covered with up to $250 in fees. Those at four-year and private universities receive $500 a semester from TIP.

The study said that TIP could “serve as a model for other states as they seek to expand college access and success.” But the authors do have recommendations for how they believe it would be more effective.

Because of barriers still in place and limited eligibility, only about one-third of eligible recipients are benefiting from this program in the state of Michigan. That translates to about 24,000 students receiving aid from TIP out of a potential 472,270 undergraduates in Michigan, according to the study.

To bridge this gap, the report recommends the TIP program expand to cover 30 credits per year instead of 24. This would allow students who wish to take 15 credits per semester, a full-time load, and therefore complete their college degree quicker. The program would still cover a cumulative total of 80 credits, so it would cost any more to the state. In fact, it would potentially save funds because tuition rates tend to increase annually. 

The authors go on to recommend that the fees be covered each semester up to $1,000, rather than the previous $250, to cover additional fees and program equipment. This also makes it easier for students to use their Pell grant towards housing and other expenses. 

Pandemic causing ‘major decline’ in low-income college student enrollment

Another recommended change is that students attending four-year universities get the equivalent amount to community college tuition, instead of a flat rate as previously written. The authors argue that the time limit should be removed from the program, which now says eligible participants must attend college within four years of graduating high school to qualify. That “limits the ability of older students to access the program,” the report says.

The report also urges for the time requirement on being enrolled in Medicaid to be increased from the current 24-month measurement to allow for differing circumstances. 

In addition, the authors recommend clear communication and data to improve accessibility, including outreach from school guidance counselors and the TIP program. 

Brown said one barrier in Michigan is that the Department of Health and Human Services and the Michigan Treasury Department do not share the number of people who meet Medicaid requirements.

“More transparency is needed on who is eligible,” she said.