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What Happened?

What Happened?. Michigan’s 2011 College access challenge grant and Maintenance of effort Waiver denial 2012 mcan conference April 30, 2012 Tom Freeland, MDE college Access & Outreach Brandy Johnson, Michigan college Access Network Chuck wilbur, public policy associates.

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What Happened?

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  1. What Happened? Michigan’s 2011 College access challenge grant and Maintenance of effort Waiver denial 2012 mcan conference April 30, 2012 Tom Freeland, MDE college Access & Outreach Brandy Johnson, Michigan college Access Network Chuck wilbur, public policy associates

  2. History of College Access Challenge Grant • 2007: President Bush signed the College Cost Reduction and Access Act (CCRAA) into law, amending the Higher Education Act of 1965 • Created the College Access Challenge Grant (CACG) program • Two year grant block grant program – FY2008 and FY2009 • Formula based on number of youth residents and percentage of residents living below the federal poverty line. • Total Allocation: $66 million in FY2008 and FY2009 • Michigan’s Allocation: $2.1 million in FY2008 and FY2009 • 2010: President Obama signed the Health Care and Education Reconciliation Act of 2010. • Extended the program for FY2010-2014 • More than doubled the funding to $150 million per year

  3. College Access Challenge Grant • Purpose: Foster partnerships among federal, state, and local governments and philanthropic organizations through matching challenge grants that are aimed at increasing the number of low-income students who are prepared to enter and succeed in postsecondary education. • Michigan’s Award: $4,268,548/year in FY10-14

  4. Michigan’s College Access Challenge Grant • CACG 1.0 (2008-2010) • Major deliverable: Create a community to support greater collaboration among college pathway professionals in Michigan. • CACG 2.0 – Year 1 (2010-2011) • Major deliverables: • MDE College Access and Outreach Unit • MichiganCAP • Michigan College Access Network • Local College Access Networks Grant Programs • KnowHow2GO Michigan • Michigan Campus Compact College Positive Volunteerism • Michigan College Advising Corps • Promise Zones • Achieving the Dream

  5. Maintenance of Effort Requirement Requires states to maintain spending for higher education at least at the average amount spent over the past five years: (a) for public institutions (excluding capital expenses and research and development costs); and (b) for private institutions (as measured by financial aid/scholarships for students attending private colleges).

  6. Waiver Authority The Secretary of Education has the authority to waive the MOE requirement if it is determined that such a waiver would be equitable due to exceptional or uncontrollable circumstances, such as a natural disaster or a precipitous and unforeseen decline in financial resources of a State.

  7. Michigan’s Maintenance of Effort Waiver Application May 2011 Michigan did not meet Maintenance of Effort in FY 11 State spending on higher education in FY10 was less than previous 5-year average (FY05-09) Michigan applied for a waiver of MOE requirement

  8. Michigan’s Waiver Application Denied September 2011 • Received letter indicating that Michigan’s CACG MOE waiver was functionally denied. • FY11 funds will only be made available to Michigan if it restores $58 million (to get a $4 million grant). • In September, 10 other states also had their waivers denied.

  9. Secretary Duncan has discretion to reconsider September 2011-Feburary 2012 MCAN began organizing state and national efforts to reverse waiver denial decision

  10. Advocacy Efforts • Major Philanthropic Organizations • Michigan Congressional Delegation • Media / Op-Eds

  11. Advocacy Talking Points • Ask Secretary Duncan to reconsider Michigan’s waiver application • Michigan has put its CACG to good use • We did not use it to supplant state efforts • We leveraged millions of $ in philanthropic support • We are helping President Obama and Secretary Duncan reach their 2020 Goal. • Michigan did not meet MOE because our state faced “exceptional and uncontrollable” financial circumstances • Near collapse of manufacturing industry • We are using CACG to mitigate our state’s economic circumstances

  12. In theory, Maintenance of Effort provisions in federal legislation is good public policy… • Obama’s 2020 Goal • State Financial Responsibility: Supplant v. Supplement • It worked for other federal education programs

  13. …but the implementation of MOE is bad public policy for CACG • Counterproductive to Obama’s 2020 goal if funds revert back to Treasury • Doesn’t take into account relevant qualitative factors • Doesn’t take into consideration how state is using funds (i.e. to mitigate painful cuts) • Pushes out philanthropic investments • Punishes states who preserved social safety nets • Policy lever doesn’t work for a very small program • Creates inequities between states

  14. Mathematical Strategy • U.S. Department of Education used “proportionality” test to determine which states got waivers. • MDE worked with State Budget Office to demonstrate that Michigan did not cut higher education spending at a higher level than other state spending with the help of SFSF dollars. • Michigan maintained $39 million for private scholarships but used TANF dollars instead of GF.

  15. Waiver Request 2.0 • In November, Superintendent Flanagan submitted a revised MOE Waiver Application. • Key Arguments: • Duncan has authority to grant waiver based on our exceptional or uncontrollable economic conditions in FY10. • “Proportionality” test had not been communicated to State when FY10 budget was being set. • Michigan committed $68 million in SFSF to higher education spending and therefore we met the “public” test. • State lawmakers saw GF and TANF as fungible resources • 1 of only 5 states that maintain a scholarship program for students attending private institutions.

  16. Final Decision • In late February, U.S. Department of Education sent Michigan a final determination letter indicated Michigan would not receive a waiver. • Three other states (Alabama, Iowa, and Ohio) received a similar letter. • Michigan could not overcome “TANF Swap” issue for private Tuition Grant.

  17. Still Fighting for Waiver for 2012 • If waiver approval process remains the same, Michigan will likely not qualify for one in 2012 or 2013. • Members of Congress and National Governors Association have asked U.S. Department of Education to consider modifying waiver process. • So far, U.S. Department of Education has not budged

  18. Refer to Attachments • Original Denial Letter • Kresge Letter to Secretary Duncan • Michigan Congressional Delegation Letter • Follow-up Letter from Superintendent Flanagan to Duncan • Op-Ed on CACG MOE Waiver • Final Denial Letter • Letter from U.S. Senate

  19. Questions? Tom Freeland, freelandt@michigan.gov Brandy Johnson, brandy@micollegeaccess.org Chuck Wilbur, cwilbur@publicpolicy.com

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