What is MI FUTURE?
Why do we need MI FUTURE?
How will MI FUTURE be funded?
Who is eligible for the MI FUTURE tax credit?
Does MI FUTURE end all other state financial aid programs?
Do Michigan students remain fully eligible for federal financial aid programs?
Does MI FUTURE help students who don't have upfront tuition money?
Does MI FUTURE create any budget savings?
Will MI FUTURE restrain tuition increases?
Will MI FUTURE create new administrative burdens on the institutions?
MI FUTURE is a reimbursable tax credit that will repay tuition and mandatory fees for Michigan high school graduates attending Michigan's public vocational/technical schools, community colleges and universities. MI FUTURE will also supplement current state and federal investments in fouryear-old preschool, fully funding a half-day program at 50% of the K-12 foundation allowance.
Research has shown that for every dollar we invest in preschool, we avoid seven dollars in social costs such as welfare, special education, abuse and neglect and corrections, and we increase academic achievement. Guaranteed four-year old preschool will not only give our children an academic jump start and improved social skills, but also save our state critical dollars in the long run.
As many families know, MI FUTURE dollars could not come at a more crucial time. Shrinking state appropriations over the last decade have led to dramatic increases in college tuition and reductions in financial aid. As a result, the doors to higher education for countless middle income students are closing. Those who are able to continue their education are taking longer to graduate or are finishing with debt ranging from several thousand to tens-of-thousands of dollars. This debt discourages the pursuit of graduate and professional degrees or careers in public and non-profit sectors.
MI FUTURE will serve as an investment in our children, our families and the state’s future, as well as an economic development tool. The MI FUTURE tax credit will grant Michigan high school graduates access to the post-secondary education necessary to prepare them for the new knowledge economy. MI FUTURE will sustain and attract the high technology, high skilled businesses essential to Michigan's economic resurgence.
MI FUTURE will be paid for by a 1.15% percent increase in the income tax (about $2 billion). The tax increase for the median income household ($49,699), before deductions, will be about $524 a year. The cumulative tax increase for a child born today and graduating from high school in 2027 will be only $9,432. Based on the average 2009 tuition rate ($8,753), total tuition for a 4-year education at Michigan public universities will be $35,012.
Taxpayers using MI FUTURE can save thousands of dollars on annual tax bills, even if only one family member pursues a higher education degree at a Michigan public institution. In today's dollars, MI FUTURE will offer users about a 358% return on investment - a real bargain!
Who is eligible for the MI FUTURE tax credit?
Any Michigan high school graduate who, regardless of age, does not have a bachelor's degree or who has an associate's degree and pursues a bachelor's and remains in good standing will be eligible for MI FUTURE. The tax credit will be graduated based on the number of years of attendance at Michigan high schools.
Does MI FUTURE end all other state financial aid programs?
No. An enhanced Tuition Grant will remain available for students at independent institutions as will the Work Study and the Part-time Independent Student Programs.
Do Michigan students remain fully eligible for federal financial aid programs?
Yes. All students who plan to claim the MI FUTURE tax credit will be required to fill out the Free Application for Federal Student Aid (FAFSA) form to assure we maximize the student's use of federal financial tuition aid. MI FUTURE will also leverage the federal Hope and Lifetime Learning tax credits. The MI FUTURE tax refund will equal the difference between actual tuition cost and tuition assistance from federal and institutional sources. This coordination of MI FUTURE with other aid will make our tax dollars work smarter.
Does MI FUTURE help students who don't have upfront tuition money?
Should family, federal and institutional aid not meet the first full year tuition, the Department of Treasury will be authorized to make need-based loans for the balance of tuition from a revolving loan fund in the MI FUTURE Trust Fund. If the student has not repaid the loan before degree completion, the Treasury will capture the final MI FUTURE tax credit and assess interest.
Does MI FUTURE create any budget savings?
MI FUTURE will restore $140 million dollars to the tobacco settlement account from Michigan Promise Grants. Another $32 million in state-sponsored undergraduate tuition aid at public institutions will be returned to the general fund. The total savings to be made available for other programs and services will be nearly $172 million.
Will MI FUTURE restrain tuition increases?
MI FUTURE will restrict yearly tuition growth to the annual change in the U.S. Consumer Price Index (Detroit) provided the legislature appropriates an operating increase of at least the CPI for universities and community colleges. Should an institution's tuition increase exceed Detroit CPI in any given year appropriations are statutorily adequate, its students would be ineligible for the tax credit in the next year. The size of the annual tax credit, currently up to $11,800, and the number of students affected should compel the institutions to restrain tuition growth.
Will MI FUTURE create new administrative burdens on the institutions?
No,. Eligibility for my future depends on number of years in attendance at a Michigan high school and continued good academic standing at the student's post-secondary institution. Because academic standing is already tracked there should be no need for additional administrative costs.