Blog Post | June 29, 2020

Flexibility in Student Aid Key to Michigan’s Economic Recovery

Author: Catherine Brown

In a typical recession, college enrollment rises. As job prospects dim, people go back to school to increase their skills. But this is no standard recession. And while a great deal of uncertainty remains, early evidence suggests a concerning trend in college access may be emerging: low-income students are sending in deposits to college at lower rates than they have in prior years.

Alma College, for example, where 35 percent of the student body is low-income, or eligible for Pell grants, is on track to enroll or re-enroll only 22 percent of Pell-eligible students this coming academic year, according to Michigan Independent Colleges and Universities. Similarly, Siena Heights University has seen the average family income of its students increase by 20 percent due a lower rate of applications from needy students and Aquinas College has experienced a 15 percent increase in enrollment overall, but a 14 percent decline in Pell-eligible students. Statewide, there has been a massive decline in applications for federal financial aid of 11 percent.  Such a precipitous drop-off in enrollment of students with the greatest need at a time when that population is rising could spell trouble for future generations and Michigan’s economic recovery.

While high tuition and student debt make headlines – and are very real problems – a college degree remains an excellent investment and offers important protection against economic downturns, especially for students from low-income communities. A 2016 study out of Georgetown University found that virtually all the new jobs added during the post Great Recession recovery went to those with some postsecondary education, and nearly 75 percent of those jobs went to those with a bachelor’s degree or higher.   According to calculations by my organization, The Institute for College Access and Success, young adults with only a high school diploma are almost three times as likely to be unemployed and earn three-fifths as much as those with at least a bachelor’s degree.

Prior to the pandemic, more low-income students were going to college than ever before. But that progress is at risk now. When students drop out of college, withdraw with the intent to re-enroll (“stop out”), or don’t enroll in the first place, they are at high risk of never completing a degree or certificate. According to the National Center for Education Statistics, 40 percent of students who start at a community college and 30 percent who start at a four-year college stop out and never graduate.

Luckily, the state has important tools at its disposal that it can use to keep students connected to college. The Tuition Incentive Program, or TIP, covers the cost of tuition of an Associate’s degree for most low-income students in the state. But unlike the other major state scholarship programs, students who are eligible for TIP must apply by August 31st of the year they graduate high school and they only have four years to begin taking classes. By extending this deadline for a year, Michigan lawmakers can protect students’ ability to go to college once this period of uncertainty is over. Without this change, students who don’t apply by August 31st will lose this scholarship aid forever.

Students who graduate and join the military are also disadvantaged by the TIP rules because once they have served their duty, their TIP eligibility period has expired. By extending the period during which students who join the military may claim their TIP grant, policymakers can pave a vital pathway to a second career for those who have given so much to our country. Serving in the military should not stand in the way of getting a college education.

The other state scholarship programs, which have more generous eligibility periods and less strenuous application processes could also be made more flexible for students by extending additional semesters of eligibility for COVID-related withdrawals. The CARES Act provided additional semesters of eligibility for the Pell grant and other federal grant aid, and the state scholarship programs should follow suit.

Colleges also have a role to play. They should proactively reach out to prospective and current students to encourage them to enroll or re-enroll and them know that there is flexibility with their institutional aid packages to help support them as they pursue their dreams. Michigan’s economic recovery depends upon continuing to make progress in college access and success, especially for first generation and low-income students for whom completing college is one of the surest pathways into the middle class.