Office of the Vice President for Global Communications

Tuesday, September 29, 2009

Coleman tells SACUA state funding impasse is discouraging; reinforces value of Promise Scholarship

President Mary Sue Coleman told a faculty governance panel Monday that state funding for higher education remains tied up in a budget impasse that grows ever more urgent as a midnight Wednesday deadline approaches.

Coleman told the Senate Advisory Committee on University Affairs she appreciates that the governor and Legislature face a daunting task in resolving the state’s projected deficit, but university officials will continue to press the case that funding colleges and universities is crucial to Michigan’s economic future.

She characterized the situation as an impasse between those who want to only pursue cuts without offering any sources for increased revenue, and those who favor raising revenues with little effort to cut spending.

“It’s quite discouraging that we can’t get some action to come up with a solution,” Coleman said. “I absolutely believe higher education is one of those things that pays enormous dividends.”

The state is required by law to pass a balanced budget by midnight Wednesday or risk a government shutdown.

Coleman also said lawmakers are hearing from “lots and lots of students” who want funding preserved for the Michigan Promise Scholarship, which provides up to $4,000 in merit-based aid over four years to 96,000 students statewide.

A House-Senate conference committee voted to scrap the scholarship last week, but House Democrats subsequently voted to search for $120 million to restore the aid. So far no definite funding source has been identified.

“Even if there had to be some sort of cutback in the size of the grant, giving something is important. A promise has been made,” Coleman told SACUA.

U-M has said that if the state reduces or eliminates the Michigan Promise Scholarship, it will provide additional financial aid up to the level required to meet a student’s full demonstrated need.

Some 6,096 students on the Ann Arbor campus are eligible for the Michigan Promise, of which 1,717 have demonstrated financial need. Those students will not be asked to cover the Michigan Promise part of their financial aid package.

The 4,379 U-M students who previously had not demonstrated need but are eligible for Michigan Promise Scholarships have been asked to pay the Promise Scholarship amount upfront. They will be credited that amount if the Promise Scholarship comes through.