House rewrites Michigan Achievement Scholarship, moves $1.1B SAF into scholarship fund and limits tuition growth

The House Appropriations Committee advanced the H‑1 substitute to House Bill 45‑80, altering higher‑education funding by redirecting large one‑time School Aid Fund (SAF) deposits to an expanded Michigan Achievement Scholarship (MAS) program, creating campus investment funds for public universities and applying tuition restraints for institutions to receive those funds.

House Fiscal presented the changes, saying the House proposes a $1.1 billion SAF 1‑time deposit into the post‑secondary scholarship fund and a $170.6 million general‑fund deposit to cover awards for private institutions. Under the House plan MAS awards would be revised to pay up to $5,500 for resident students at four‑year institutions and up to $2,750 for community‑college students; awards to public universities were capped at $828.1 million and private institutions at $170.6 million, with community colleges capped at $276.4 million. The House also eliminated earlier ongoing general‑fund tuition grant programs and competitive scholarships and inserted a $828.1 million “campus investment” allocation for universities limited to infrastructure, technology, equipment, maintenance, safety and debt reduction.

Why it matters: The restructured scholarship program expands eligibility and redirects state resources; several members said the changes aim to encourage Michigan students to attend and remain in state institutions but also create new compliance conditions and impose tuition restraints (3% or $489, whichever is greater) for institutions seeking campus investment funds.

Key points

- Scholarship restructuring: The House would remove income and graduation‑year limits for MAS and expand awards (up to $5,500 for four‑year students; up to $2,750 for community‑college students). House Fiscal described a total MAS funding level in the current plan of roughly $1.29 billion (including the one‑time deposits).

- Campus investment funds and tuition restraint: The bill creates campus investment funds (listed as a $828.1 million allocation in the House summary) restricted to capital, maintenance, technology and safety. Institutions with larger endowments would see percentage reductions to their campus investment allocations (50% reduction for $1B–$5B endowments, 65% for $5B–$10B, 75% for more than $10B), and institutions must limit resident undergraduate tuition and fee increases to the greater of 3% or $489 to receive these funds.

- Fiscal shifts: The House proposal shifts significant funds between the general fund and the School Aid Fund. House Fiscal noted that while direct university appropriations drop compared with FY25 operations, the inclusion of estimated MAS payments brings total estimated allocations for FY26 roughly flat to FY25 levels.

Debate and questions

- Enrollment and eligibility math: Committee members sought clarification on MAS award estimates and how a new definition of full‑time enrollment (15 credits per semester) affects award counts and estimated costs; House Fiscal said estimates use FY24 full‑time equated student counts and noted differences may emerge when awards are calculated under the new definitions.

- Restrictions and parity: Members questioned the caps for private institutions and the effect of tying campus funds to tuition‑increase limits. The committee also added and considered amendments to protect certain agricultural and veteran priorities; those amendments failed on roll calls.

What the record shows: Committee documents and House Fiscal presentations detail the spending shifts, tuition restraints, and the campus investment fund rules. The H‑1 substitute passed committee and the proposal will move to further House consideration and conference as budgets are reconciled.