House panel adopts higher‑education H‑1 that reshapes university support, funds large one‑time scholarship deposits

The House Appropriations Subcommittee on Higher Education and Community Colleges adopted the H‑1 substitute for House Bill 4,580 and reported it with a recommendation that it pass.

Perry Zylak of the House Fiscal Agency summarized major changes in the House substitute for university appropriations, noting the substitute creates a campus investment fund and redirects funding into a restructured Michigan Achievement Scholarship. "The House includes a net decrease of $828,100,000 gross, or a $1,200,000,000 general fund reduction for university appropriations," Zylak said, explaining that the House removed $1,650,000,000 gross of ongoing operational grants and replaced some support with a campus investment fund limited to infrastructure, technology, equipment, maintenance, safety and capital debt reduction. Zylak said distribution of that fund is based on fiscal‑year‑24 resident full‑time‑equivalent students and that institutions with larger endowments would face percentage reductions (50% for endowments $1–5 billion; 65% for $5–10 billion; 75% for >$10 billion), which Zylak said would affect Michigan State University and the University of Michigan, Ann Arbor.

The House substitute also provides a large, one‑time School Aid Fund deposit into a revised Postsecondary Scholarship Fund and creates a Postsecondary Scholarship Private Institution Fund. Zylak said the revised Michigan Achievement Scholarship would award up to $5,500 to resident students at four‑year public or private institutions and up to $2,750 to resident students at community colleges or tribal institutions, without income‑based eligibility. The House adds a $1,100,000,000 SAF one‑time deposit into the Postsecondary Scholarship Fund and a $170,600,000 general‑fund one‑time deposit into the private institution fund, with sector caps for distribution (for example, $828,100,000 cap for public universities).

Zylak highlighted several boilerplate and policy changes: tuition and fee increase restraints (resident tuition and fee increases limited to the greater of 3% or $489 to receive campus investment funds); restrictions on DEI spending with amounts removed from campus investment funds if spent; a cap limiting non‑instructional salary spending to no more than 10% with half of excess deducted from campus investment funds; athletic participation limits restricting biologically defined males from female sports teams with the state budget director authorized to withhold 5% of monthly campus investment fund payments for noncompliance; and deletion of language that treated all veterans as in‑state residents for tuition determination.

Representative Longjohn raised concerns that House Fiscal Agency summary numbers did not match the bill text until members arrived in the room, which she said hindered the ability to make an informed vote. She also asked how long the one‑time scholarship funding could be expected to sustain the revised Michigan Achievement Scholarship; Chair Markkanen said negotiations remain ongoing and the funding horizon is subject to future budget decisions. Representative Rogers questioned why the definition of a full‑time student was changed from 12 to 15 credits in the substitute; Chair Markkanen said that was an item for negotiation.

The subcommittee recorded roll‑call votes on adoption and reporting motions. The H‑1 substitute was adopted in committee and reported with a recommendation to pass.