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2009 July 13 - 12:00 am

MONEY TREE: Students, Colleges Scramble To Save Imperiled Mich. Scholarship Program

LANSING, Mich. (AP) — Students and colleges are asking lawmakers to hold off on proposed cuts to Michigan’s main state-funded college scholarship, saying the cuts threaten aid to 96,000 students this fall.

The Republican-led Senate by a 19-17 vote approved a higher education budget that would eliminate funding for the Michigan Promise scholarship and also reduce funding for some need-based financial aid. Democrats who control the House said they would try to restore at least some of the program’s money before the new fiscal year begins Oct. 1.

Eliminating the scholarships would save the cash-strapped state budget about $140 million next fiscal year. Michigan faces a projected budget shortfall of about $1.8 billion, not counting the state’s K-12 education budget, next fiscal year as the recession continues to eat away at tax revenues.

Students and associations that represent Michigan’s community colleges and universities told a House subcommittee that the financial assistance from scholarships and financial aid is critical.

They said families are struggling to pay bills amid Michigan’s nation-high unemployment rate.

“Michigan is in really tough times right now,” said Josh Chapin, a Michigan State University student who benefited from a merit-based state scholarship program. “This money is very important to us.”

The Michigan Promise scholarship gives students up to $4,000 over their college careers, typically in installments of $1,000 to $2,000. High school students who do well on state standardized tests can get some of the money as they go into college, while other students qualify after completing some college credits

Lt. Gov. John Cherry, expected to seek the Democratic nomination for governor in 2010, said eliminating the Michigan Promise scholarship would break a promise to students and families already counting on the cash.

Cherry acknowledged that the scholarship program may not be immune from some reductions because of the severity of Michigan’s overall budget problems.

But he said eliminating the scholarship completely would undermine Michigan’s goal of increasing its number of college graduates.

Senate Republicans inserted a placeholder for the program in the budget bill, reserving a spot to at least partially restore scholarship money if it can be found later in the budget process.

But that won’t be easy given Michigan’s budget headaches.

Lawmakers don’t have many options for cutting education spending.

The state can’t significantly reduce general aid to universities if it wants to get budget help from the federal Recovery Act.

Senate Majority Leader Mike Bishop, a Republican, wants the state to seek waivers from the federal government to get more flexibility in education spending.

But that’s not likely to happen under the Democratic administration of Gov. Jennifer Granholm, which already has said in Michigan’s applications for Recovery Act money that education funding will be maintained at fiscal year 2006 levels.   

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