The Michigan Senate recently voted to cut the $140 million Michigan Promise Scholarship. Created in 2006, this tuition assistance program awards $4,000 to each student who achieves a proficient score on the Michigan Merit Exam. It also hands out another $4,000 to each student who fails to meet the MME proficiency level but maintains a 2.5 GPA in their first two years at a Michigan college.
Supporters claim it is an essential part of improving access to higher education, and that a better-educated workforce will ultimately improve our economy. No matter what types of arguments are given for the Michigan Promise Scholarship and other tuition assistance programs, keep in mind that these are not an essential function of government. As the Legislature attempts to deal with a nearly $2 billion overspending crisis it has created, policymakers would do well to eliminate these costly and ineffectual programs.
Proponents of the Promise Scholarship and similar programs argue that they allow more students to afford college. On the surface this seems plausible. These programs, however, also contribute to the rising costs of tuition. Colleges rely on these tuition grants and expand their already massive budgets to accommodate and attract even more students and subsidized tuition dollars. It is no coincidence that, as these tuition assistance programs have grown over the last decade, tuition costs have skyrocketed.
Higher tuition makes it more difficult for all students to afford a postsecondary education. Since the Michigan Promise Scholarship is not a needs-based program, it can affect those students who would have the most difficult time affording higher tuition. The way the program is structured, the students who are not proficient on the MME — but still show some promise by maintaining a 2.5 GPA in college — cannot receive any of the funds until after their sophomore year. Traditionally, students who fail to meet the proficiency mark on the MME are disproportionately from low-income families. This burdens low-income students with higher tuition cost for their first two years of college.
Not only do these types of tuition assistance programs harm college students, they also hinder the growth of our economy. Dr. Richard Vedder, an adjunct scholar at the Mackinac Center, conducted a comprehensive study of all 50 states over the course of 46 years and discovered a negative correlation between the amount of higher education spending and economic growth in terms of real per capita income. In other words, the more Michigan spends on higher education programs like the Michigan Promise Scholarship, the less our economy grows.
This may seem confusing because there is a positive correlation between the number of college-educated people in a state and the robustness of that state's economy. It seems fair then to assume that Michigan should attempt to increase the number of college educated residents. In fact, Gov. Jennifer Granholm in 2004 said her goal was to double the number of college graduates in Michigan by 2015. This is a worthy goal, but do tuition assistance programs increase the number of college graduates in the state of Michigan?
A recent study by the American Enterprise Institute discovered that only 52 percent of Michigan college students graduate within 6 years. If our goal is to increase the number of college graduates through tuition assistance programs, we are starting with only a 52 percent chance of success right off the bat.
Those who do graduate migrate to places where there is demand for their services. Unfortunately, Michigan is not one of those places. Currently, almost half of the graduates from Michigan's largest universities find their first jobs in other states, according to a study done by Michigan Future Inc. Why should Michigan taxpayers subsidize the education of future Texas, Florida or North Carolina residents?
Michigan instead should focus on creating the type of economic environment that will attract the businesses that demand college graduates. Reforming Michigan's labor, tax and regulatory climate would be a good start.
Michael Van Beek is director of education policy 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.