SENATE BILL NO. 382

A bill to create a financial aid program for certain residents of this state who attend certain postsecondary educational institutions in this state; to provide for the administration of the financial aid program; to provide for the promulgation of rules; and to provide for the powers and duties of certain state officers and entities.

the people of the state of michigan enact:

Sec. 1. (1) This act may be cited as the "Michigan achievement scholarship act".

(2) The Michigan achievement scholarship is created in this act and, subject to appropriation, is funded in article III of the state school aid act of 1979, 1979 PA 94, MCL 388.1836 to 388.1891, to provide last-dollar scholarship assistance to certain residents of this state attending certain postsecondary educational institutions in this state; to provide a community college guarantee ensuring a tuition-free pathway for attendance at eligible community colleges; to provide scholarship assistance for attendance at eligible public and private universities; and to provide scholarship recipients with greater access to the education and skills needed to succeed in and meet the demands of this state's evolving economy and workforce.

Sec. 3. As used in this act:

(a) "Cost of attendance" means expenses for a student's tuition, mandatory fees, and contact hours for the student's actual program of study; books, supplies, and equipment required for courses of instruction; housing and food costs; transportation costs; federal student loan fees; miscellaneous costs, including a reasonable amount for the documented cost of a personal computer, allowance for child care, or allowance for other dependent care; costs related to a disability; costs of obtaining a license, certification, or first professional credential; and reasonable costs for study abroad programs.

(b) "Department" means the department of lifelong education, advancement, and potential.

(c) "Eligible institution" means a public university that receives an appropriation in section 236 of the state school aid act of 1979, 1979 PA 94, MCL 388.1836, a community college that receives an appropriation in section 201 of the state school aid act of 1979, 1979 PA 94, MCL 388.1801, a federally recognized tribal college in this state, or an independent nonprofit college or university in this state as described in section 1 of 1966 PA 313, MCL 390.991.

(d) "Gift aid" includes federal Pell grants under 20 USC 1070a, tuition incentive program benefits under section 256 of the state school aid act of 1979, 1979 PA 94, MCL 388.1856, state tuition grants under section 252 of the state school aid act of 1979, 1979 PA 94, MCL 388.1852, amounts received for minimum payments awarded under section 248 of the state school aid act of 1979, 1979 PA 94, MCL 388.1848, higher education expenses paid under the Michigan promise zone authority act, 2008 PA 549, MCL 390.1661 to 390.1679, and all other federal, state, local, or institutional aid in the form of grants, scholarships, or discounts applied only toward tuition and mandatory fees. Gift aid does not include student loans, work-study awards, qualified withdrawals made from education savings accounts to pay higher education expenses pursuant to the Michigan education savings program act, 2000 PA 161, MCL 390.1471 to 390.1486, or higher education expenses paid under the Michigan education trust program pursuant to the Michigan education trust act, 1986 PA 316, MCL 390.1421 to 390.1442.

(e) "High school equivalency certificate" means that term as defined in section 4 of the state school aid act of 1979, 1979 PA 94, MCL 388.1604.

(f) "Last-dollar" means 1 of the following:

(i) For a student attending a community college or federally recognized tribal college, an amount equal to the student's tuition, mandatory fees, and contact hours for the student's actual program of study, minus all gift aid received by the student.

(ii) For a student attending a public university or an independent nonprofit college or university, or for a student enrolled in a baccalaureate degree program described in section 121 of the community college act of 1966, 1966 PA 331, MCL 389.121, an amount equal to the student's individual cost of attendance, minus all gift aid received by the student.

(g) "SAI eligible student" means a student who has completed the Free Application for Federal Student Aid and meets at least 1 of the following:

(i) Received the Michigan achievement scholarship in academic year 2023-2024, was determined to have an expected family contribution of $25,000.00 or less in academic year 2023-2024, and has completed the Free Application for Federal Student Aid for the subsequent award cycles.

(ii) For awards made during academic year 2024-2025 or a subsequent academic year, has a student aid index number of 30,000 or less. If the federal government replaces the student aid index number with a new metric, the department shall collaborate with the state budget office and the house and senate fiscal agencies to adopt a new eligibility metric equivalent to a student aid index number of 30,000 or less.

Sec. 5. (1) The department shall administer the Michigan achievement scholarship pursuant to this act, the Michigan achievement skills scholarship act, article III of the state school aid act of 1979, 1979 PA 94, MCL 388.1836 to 388.1891, and the administrative procedures of the department.

(2) Payments for Michigan achievement scholarships are subject to appropriation under article III of the state school aid act of 1979, 1979 PA 94, MCL 388.1836 to 388.1891.

Sec. 7. Subject to section 9(2), an individual must meet all of the following criteria each year to be eligible for a Michigan achievement scholarship awarded under this act:

(a) Maintain residency in this state, as determined for purposes of the Free Application for Federal Student Aid.

(b) Have graduated with a high school diploma or certificate of completion or achieved a high school equivalency certificate in 2023 or after.

(c) Be enrolled in an eligible institution as a full-time undergraduate student, as defined by the eligible institution, for the semester the award is received.

(d) Have enrolled for the first time in an eligible institution during the 2023-2024 academic year, or a subsequent academic year, within 15 months after high school graduation or attainment of a high school equivalency certificate or have received a Michigan achievement scholarship or Michigan achievement skills scholarship in a previous academic year. For the purposes of this subdivision, participation in a dual enrollment, early college, or other similar program while attending high school does not disqualify a student from being considered a first-time enrollee.

(e) Maintain satisfactory academic progress, as defined by the eligible institution in which the student is enrolled.

(f) Not be in default on a federal student loan.

(g) Apply for and accept all available gift aid for each academic year in which the individual applies for a Michigan achievement scholarship.

(h) For an individual who is enrolled at an eligible institution that is a public university or an independent nonprofit college or university, or who is enrolled in a baccalaureate degree program described in section 121 of the community college act of 1966, 1966 PA 331, MCL 389.121, at an eligible institution, be an SAI eligible student.

Sec. 9. (1) The department may only award scholarships under this act subject to the availability of funds appropriated for the Michigan achievement scholarship under section 236 of the state school aid act of 1979, 1979 PA 94, MCL 388.1836. An eligible student enrolled in an eligible institution must be awarded 1 of the following amounts, as applicable:

(a) For an eligible student who is enrolled at an eligible institution that is a community college or federally recognized tribal college where the student is eligible for that institution's in-district tuition rate, the last-dollar payment amount. The amount awarded to a student receiving an award under this subdivision who is eligible for a federal Pell grant under 20 USC 1070a may include an additional payment amount pursuant to section 248 of the state school aid act of 1979, 1979 PA 94, MCL 388.1848.

(b) For an eligible student who is enrolled at an eligible institution that is a community college or federally recognized tribal college where the student is not eligible for that institution's in-district tuition rate, the last-dollar payment amount or the in-district tuition and mandatory fees rate, whichever is less. The amount awarded to a student receiving an award under this subdivision who is eligible for a federal Pell grant under 20 USC 1070a may include an additional payment amount pursuant to section 248 of the state school aid act of 1979, 1979 PA 94, MCL 388.1848.

(c) For an eligible student who is enrolled at an eligible institution that is a public university or an independent nonprofit college or university, or is enrolled in a baccalaureate degree program described in section 121 of the community college act of 1966, 1966 PA 331, MCL 389.121, the amount prescribed under section 248 of the state school aid act of 1979, 1979 PA 94, MCL 388.1848.

(2) An eligible student may receive a Michigan achievement scholarship award under this act for a maximum of 5 consecutive academic years, starting when the eligible student enrolls at an eligible institution for the first time as described in section 7(d), less any period of eligibility used for a skills scholarship awarded under the Michigan achievement skills scholarship act, and not more than 3 years of which may be for attending eligible institutions that are community colleges or federally recognized tribal colleges unless the student is enrolled in a baccalaureate degree program described in section 121 of the community college act of 1966, 1966 PA 331, MCL 389.121. A student may not receive an award under this act and the Michigan achievement skills scholarship act during the same academic term.

Sec. 11. (1) In connection with its administration of the Michigan achievement scholarship, the department shall do all of the following:

(a) Develop and implement a process that, pursuant to this act and section 248 of the state school aid act of 1979, 1979 PA 94, MCL 388.1848, awards Michigan achievement scholarships to eligible students who are attending eligible institutions.

(b) Work closely with eligible institutions to provide the highest level of participation and ensure that all the requirements of this act are met.

(c) Convene a workgroup to advise the department on the administration of the Michigan achievement scholarship. The workgroup must include participation from the Michigan Association of State Universities and its institutional members, the Michigan College Access Network, the Michigan Community College Association and its institutional members, the Michigan Independent Colleges and Universities and its institutional members, and any other interested stakeholders and offices as determined by the department.

(d) By February 15 of each year, provide a written report, organized by eligible institution, to the house and senate appropriations subcommittees on higher education, the house and senate fiscal agencies, and the state budget director that includes all of the following information for the previous academic year:

(i) The number of students who qualified for a Michigan achievement scholarship.

(ii) The number of students who received a Michigan achievement scholarship.

(iii) The average number of credits earned by students who received a Michigan achievement scholarship.

(iv) The number of Michigan achievement scholarships that were canceled due to failure to maintain satisfactory academic progress as described in section 7(e).

(v) The number of Michigan achievement scholarships that were canceled due to a student ceasing attendance at an eligible institution. The number must not include any known transfers to another eligible institution.

(vi) The number of Michigan achievement scholarships that were canceled due to a student's failure to maintain full-time status as described in section 7(c).

(vii) The average Michigan achievement scholarship award per student.

(viii) As applicable, a delineation of each measure described in subparagraphs (i) to (vii) by sector, including community colleges, tribal colleges, public universities, and independent colleges and universities.

(2) Each eligible institution whose students receive awards under this act shall cooperate with the department in a timely manner to facilitate the creation of the report under subsection (1)(d).

Sec. 13. (1) An eligible institution for the Michigan achievement scholarship shall do all of the following:

(a) By April 1 of each year, submit a report to the department, the state budget office, and the house and senate fiscal agencies providing information as to the average amount of institutional grant aid awarded to full-time first-time undergraduate students for the immediately preceding 2 institutional fiscal years. If the average amount of institutional grant aid awarded to full-time first-time undergraduate students in the immediately preceding institutional fiscal year is less than the average amount of institutional grant aid awarded to full-time first-time undergraduate students in the year preceding the immediately preceding institutional fiscal year, the institution must include in the report a description of any changes to the institutional financial aid during the 2 immediately preceding institutional fiscal years. An institution's report of the average amount of institutional grant aid awarded to full-time first-time undergraduate students pursuant to this subdivision must be consistent with data most recently reported to the Integrated Postsecondary Education Data System.

(b) For each state fiscal year, maintain and report its compliance with the following tuition and fee restraint rates, as applicable:

(i) For an eligible institution that is a community college or a federally recognized tribal college in this state, the tuition and fee restraint rate described in article II of the state school aid act of 1979, 1979 PA 94, MCL 388.1801 to 388.1830.

(ii) For an eligible institution that is a public university or independent nonprofit college or university, the tuition and fee restraint rate described in article III of the state school aid act of 1979, 1979 PA 94, MCL 388.1836 to 388.1891. The report of an eligible institution that is an independent nonprofit college or university must include the actual tuition and mandatory fee rates adopted by the institution's governing board for each academic year as described in tuition and fee restraint provisions of article III of the state school aid act of 1979, 1979 PA 94, MCL 388.1836 to 388.1891.

(2) The state budget director shall implement reporting requirements to ensure that an eligible institution has satisfied the tuition and fee restraint requirements of this section. The state budget director has the sole authority to determine if an eligible institution has met the requirements of this section.

(3) If an eligible institution exceeds the applicable tuition and fee restraint rate for 2 consecutive years, the state budget director may consider the institution ineligible to receive money appropriated for Michigan achievement scholarships in the subsequent academic year.

(4) If an institution is considered ineligible to receive money appropriated for Michigan achievement scholarships under this section, the state budget director must reevaluate the status of the ineligible institution annually.

(5) It is the intent of the legislature that an eligible institution will not make reductive changes to institutional grant aid offered by that eligible institution that has the goal or net effect of shifting the cost burden of those programs to the program described in this act.

Sec. 15. (1) Except as otherwise provided in subsection (2), the department may promulgate rules to implement this act pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(2) The department shall not apply any student eligibility criteria not listed in section 7.

Enacting section 1. This act does not take effect unless Senate Bill No. 383 of the 103rd Legislature is enacted into law.