After the fate of the Michigan Promise Scholarship experienced a rollercoaster ride of ups and downs before ultimately being cut in the state’s final budget for the 2010 fiscal year, the fate of the grant program has now taken another turn.
Democratic Gov. Jennifer Granholm unveiled a plan to restore the Promise Scholarship in a new form in her budget proposal released Thursday. Under Granholm’s plan, the scholarship would reappear in the 2011 fiscal year budget, but this time as a tax credit given to graduates of state universities who stay in Michigan to work for a year or longer after completing their education.
Students interviewed over the last week said that while Granholm’s plan to reinstate the Promise Scholarship is a good initiative, some expressed skepticism as to whether legislators will actually follow through with the proposal since it’s in the form of a tax credit. In addition, students voiced concern that a $4,000 tax credit may not be enough of an incentive to keep graduates in Michigan.
The original Promise Scholarship program — which 6,096 University students were eligible for this academic year, according to University spokesman Rick Fitzgerald — awarded students $500 to $4,000 over the course of four years based on a merit exam taken during high school. The scholarship was given to approximately 96,000 college students in the state.
Officials are hopeful the new Promise Scholarship, if included in the budget by the House and Senate, will play a key role in improving Michigan’s economy by serving as an incentive for college graduates to stay in the state.
“I think there are a number of features of the plan that focus on helping the state’s economy, including the goal of helping to reverse the brain drain that a lot of people are worried about,” Cynthia Wilbanks, vice president for government relations, wrote in an e-mail interview with The Michigan Daily last week.
Business junior Jason Raymond, chair of the Michigan Student Assembly’s External Relations Committee, said he’s wary of the state legislature’s ability to hammer out the proposal’s details.
“I’m definitely glad she brought it up, but if you listen to her speech, she doesn’t outline how to budget money for it,” Raymond said. “So it’s a start, but it remains to be seen whether (the state’s) congress will even pass it.”
Rackham student Jordan Twardy, president of the Student Association of Michigan — an organization comprised of student leaders from 11 universities in the state — was similarly cautious of potential costs to students.
Though Granholm proposed to keep state funding for higher education at the current year’s budget level, Twardy said he’s concerned this allocation won’t be sustained during the budget negotiations.
“Every time we insist on not raising taxes, we end up having to cut funding to higher education, which is just a backdoor tax on students,” he said. “To me, that’s the state government saying they don’t have the spine to follow through on making higher education a priority.”
Twardy told the Daily in January that SAM, MSA and Stop The Hike — a campus group aimed at curbing the cost of tuition — are tentatively planning a protest of potentially drastic cuts in state appropriations to higher education in Lansing on Mar. 24.
“It’d be nice, but I just don’t know if it has any teeth,” Twardy said of Granholm’s directive to freeze higher education appropriations. “We’ve had this rhetoric of ‘no new taxes, cut, cut cut,’ and now we can’t raise any revenue for it.”
Raymond said he and his colleagues plan to devote their energy to lobbying for an end to cuts in state funding for higher education, as Granholm has proposed.
“It’s kind of a wait and see thing right now,” Raymond said. “They just need to know that if the state’s going to emerge from the recession it’s currently in, higher education is going to be a large part of the solution.”
Several students said they were happy to see a plan put in motion to restore the scholarship.
“At least she’s trying to appease us,” LSA freshman Grace Lieb said. “It obviously wasn’t much of a promise when they took it away, so any effort to bring it back is a good thing.”
LSA freshman Adrienne Meltzer said she is unsure whether the new version of the scholarship will be a strong enough incentive to attract enough prospective in-state students that would collectively work to improve the state’s economy.
“I think there’s still some incentive,” Meltzer said. “However, if your financial aid is still such that you can’t pay for tuition up front, which is required, knowing you’ll get the tax credit in four years isn’t going to change your position much.”
Meltzer added that having the scholarship in the form of a tax credit after graduation won’t help many students and their families struggling to pay tuition during their undergraduate years.
“If you need the money deducted from your tuition right away, that could be a problem for some families,” she said.
Engineering freshman Mohammed Rafid said the $4,000 tax credit is also probably too small an amount to deter students from more affluent families from leaving the state after graduation.
“Even with the down economy, there are families in Michigan that have money,” he said. “Coming from a middle-income family, $4,000 wouldn’t have held me back from going out of state if I’d wanted to.”
Rafid also said he didn’t think the new version of the scholarship would pass the House and Senate.
“It’s too much money for a program that might not be effective,” he said.
Twardy said he thinks a stable economy will ultimately influence students’ decisions whether to stay in Michigan after graduation.
“Graduates will eat through that $4,000 if they can’t find jobs,” he said. “I think it’s great that they’re incentivizing the students to stay in state, but we have to make sure the infrastructure is there and the jobs are there before people will do that.”
Legislators are expected to return a revised budget to Granholm by July 1.