FY 2024-25: HIGHER EDUCATION
Summary: As Passed by the House
House Bill 5505 (H-1)
Analyst: Perry Zielak
Difference: House
FY 2023-24 From FY 2023-24
Enacted FY 2024-25 FY 2024-25 FY 2024-25 FY 2024-25 Enacted
as of 2/7/24 Executive House Senate Conference Amount %
IDG/IDT $0 $0 $0 $ $ $0 --
Federal 131,026,400 3,200,000 3,200,000 (127,826,400) (97.6)
Local 0 0 0 0 --
Private 0 0 0 0 --
Restricted 482,268,300 545,468,300 457,668,300 (24,600,000) (5.1)
GF/GP 1,677,754,100 1,765,528,700 1,818,485,100 140,731,000 8.4
Gross $2,291,048,800 $2,314,197,000 $2,279,353,400 $ $ ($11,695,400) (0.5)
Note: Appropriation figures for FY 2024-25 include all proposed appropriation amounts, including amounts designated as "one-
time."
Overview
The Higher Education budget, contained in Article 3 of the compiled School Aid Act, provides funding for operational
support of the state's 15 public universities, the AgBioResearch and Extension programs operated by Michigan State
University; some retirement costs for employees who participate in the state public school employee retirement system;
various financial aid programs for students attending public and independent colleges and universities in the state; and
several other smaller higher education-related programs.
FY 2023-24 FY 2024-25
Enacted House
Major Budget Changes from FY 2023-24 Enacted Appropriations (as of 2/7/24) Change
1. University Operations Increase Gross $1,642,043,900 $54,752,100
Executive includes a net increase of $41.3 million Gross ($52.5 million Restricted 443,168,300 6,000,000
GF/GP reduction) for university operations, a 2.5% increase. This GF/GP $1,198,875,600 $48,752,100
includes:
• $40.7 million GF/GP ongoing increase to operations grants for
universities, with all universities receiving a 2.5% increase.
• $507,800 GF/GP increase based on FY 2022-23 North American
Indian Tuition Waiver program costs reported by institutions.
• Replaces $93.8 million GF/GP with a corresponding amount of
School Aid Fund (SAF).
Attainment of the operations increase would be conditioned on
restraining resident undergraduate tuition and fee increases to the
greater of 5.0% or $781 (set at 4.5% or $676 in the current year).
Projected funding changes for universities would range from 1.9% to
2.7%. Total funding for operations would be $1.7 billion Gross ($1.1
billion GF/GP).
House includes a net increase of $54.8 million Gross ($48.8 million
GF/GP) for university operations, a 3.3% increase. This includes:
• $53.7 million Gross ($47.7 million GF/GP) ongoing increase to
operations grants for universities, with all universities receiving a
3.3% increase.
• $1.0 million GF/GP increase based on FY 2022-23 North American
Indian Tuition Waiver program costs reported by institutions and
incorporating Bay Mills Community College into the ITW program.
[continued on next page]
House Fiscal Agency 1 5/8/2024
 FY 2023-24 FY 2024-25
Enacted House
Major Budget Changes from FY 2023-24 Enacted Appropriations (as of 2/7/24) Change
1. University Operations Increase (continued)
Attainment of the operations increase would be conditioned on
restraining resident undergraduate tuition and fee increases to the
greater of 4.5% or $703 (set at 4.5% or $676 in the current year).
Projected funding changes for universities would range from 2.9% to
6.0%. Total funding for operations would be $1.7 billion Gross ($1.2
billion GF/GP).
2. Michigan State University Extension and AgBioResearch Gross $71,743,400 $2,353,200
Programs Increase GF/GP $71,743,400 $2,353,200
Executive includes a net increase of $1.8 million GF/GP for MSU's
AgBioResearch and Extension program funding. This includes:
• $963,000 GF/GP ongoing operations increase for the MSU
AgBioResearch program, a 2.5% increase.
• $830,600 GF/GP ongoing operations increase for the MSU
Extension program, a 2.5% increase.
Total funding for AgBioResearch and Extension programs would be
$73.5 million GF/GP.
House includes a net increase of $2.4 million GF/GP for MSU's
AgBioResearch and Extension program funding. This includes:
• $1.3 million GF/GP ongoing operations increase for the MSU
AgBioResearch program, a 3.3% increase.
• $1.1 million GF/GP ongoing operations increase for the MSU
Extension program, a 3.3% increase.
Total funding for AgBioResearch and Extension programs would be
$74.1 million GF/GP.
3. Michigan Public School Employee Retirement System (MPSERS) Gross $9,100,000 ($600,000)
Normal Cost Offset Restricted 9,100,000 (600,000)
Executive decreases reimbursement funding provided to universities by GF/GP $0 $0
$600,000 SAF, a 6.6% decrease, due to maintaining the assumed rate
of return for MPSERS at 6.0%. Total funding for the MPSERS Normal
Cost Offset would be $8.5 million SAF. House concurs.
4. Michigan Achievement Scholarship/Postsecondary Scholarship Gross $300,000,000 $36,000,000
Fund Deposit GF/GP $300,000,000 $36,000,000
Executive includes a net increase of $30.0 million GF/GP for deposit into
the Postsecondary Scholarship Fund, a 10.0% increase, which is the
funding source for Michigan Achievement Scholarships. The
scholarships are awarded to eligible in-state students that graduate high
school or achieve an equivalency certificate in 2023 or after and attend
an eligible Michigan public university, community college, tribal college
or independent nonprofit college or university full-time. Includes the new
Community College Guarantee, which would expand last-dollar aid and
a $1,000 needs-based stipend for community college students. After a
total $330.0 million GF/GP deposit into the Postsecondary Scholarship
Fund, total funding for Michigan Achievement Scholarships for FY 2024-
25 would be $330.0 million restricted.
House includes an increase of $36.0 million GF/GP for deposit into the
Postsecondary Scholarship Fund, a 12.0% increase. Does not include
the Community College Guarantee. Revises last dollar awards to include
the full cost of attendance minus gift aid received. After a total $336.0
million GF/GP deposit into the Postsecondary Scholarship Fund, total
funding for Michigan Achievement Scholarships for FY 2024-25 would
be $336.0 million restricted.
House Fiscal Agency 2 5/8/2024
 FY 2023-24 FY 2024-25
Enacted House
Major Budget Changes from FY 2023-24 Enacted Appropriations (as of 2/7/24) Change
5. Tuition Incentive Program Gross $73,800,000 $20,000,000
Executive includes a net increase of $20.0 million Gross ($93.8 million Federal 73,800,000 (73,800,000)
GF/GP) for the Tuition Incentive Program (TIP), a 27.1% Gross increase. GF/GP $0 $93,800,000
This includes adding GF/GP to replace federal Temporary Assistance
for Needy Families (TANF) funding that would instead be used to
increase supports for low-income families including cash assistance rate
increases, emergency relief, and child care rate increases in other
budget areas. TIP pays Medicaid-eligible students' tuition costs for
associate degrees under Phase I and bachelor's degrees under Phase
II. The increase addresses increased student participation and
increased tuition and fees. Total funding for TIP would be $93.8 million
GF/GP. House concurs.
6. Michigan Competitive Scholarships Gross $26,861,700 ($6,930,800)
Executive includes a net decrease of $6.9 million Gross (increase of Federal 23,930,800 (23,930,800)
$19.9 million GF/GP) for Michigan Competitive Scholarships, a 25.8% GF/GP $2,930,900 $17,000,000
Gross decrease. This includes adding GF/GP to replace federal TANF
funding that would instead be used to increase supports for low-income
families including cash assistance rate increases, emergency relief, and
child care rate increases in other budget areas. The scholarships are
awarded to students with a qualifying SAT score and demonstrated
financial need. The reduction is due to the anticipated phase-out of the
scholarship program as student awards increase under the Michigan
Achievement Scholarship program. Total funding for Michigan
Competitive Scholarships would be $19.9 million GF/GP. House
concurs.
7. Children of Veterans and Officer's Survivor Tuition Grant Gross $1,400,000 $600,000
Programs GF/GP $1,400,000 $600,000
Executive increases funding by $600,000 GF/GP for Children of
Veterans and Officer's Survivor Tuition Grant programs, a 42.9%
increase. The grants are awarded to children of deceased or
permanently disabled military veterans or to surviving spouses and
children of Michigan police officers and firefighters killed in the line of
duty. The increases are due to increased student participation in the
programs and increased tuition and fee costs. Total funding for the
Children of Veterans and Officer's Survivor Tuition Grant programs
would be $2.0 million GF/GP. House concurs.
8. Tuition Grant Program Gross $42,021,500 $0
Executive includes a net decrease of $7.1 million Gross (increase of Federal 30,095,600 (30,095,600)
$34.9 million GF/GP) for the Tuition Grant Program, a 16.9% Gross GF/GP $11,925,900 $30,095,600
decrease. This includes adding GF/GP to replace federal TANF funding
that would instead be used to increase supports for low-income families
including cash assistance rate increases, emergency relief, and child
care rate increases in other budget areas. The program provides need-
based tuition assistance to students at Michigan independent (i.e.,
private, non-profit) colleges and universities. The reduction is due to the
anticipated phase-out of the scholarship program as student awards
increase under the Michigan Achievement Scholarship program. Total
funding for Tuition Grants would be $34.9 million GF/GP.
House replaces $30.1 million federal TANF funding with a corresponding
amount of GF/GP. Total funding for Tuition Grants would be $42.0 million
GF/GP.
House Fiscal Agency 3 5/8/2024
 FY 2023-24 FY 2024-25
Enacted House
Major Budget Changes from FY 2023-24 Enacted Appropriations (as of 2/7/24) Change
9. Michigan Reconnect Program Gross NA $0
Executive transfers $62.0 million GF/GP from the Michigan Department GF/GP NA $0
of Labor and Economic Opportunity (LEO) for the Michigan Reconnect
Program. The program provides last-dollar scholarships primarily to
individuals 25 or older (temporarily expanded to 21-24 year-olds through
November 2024) with a high school diploma or equivalency certificate to
complete a Pell-eligible associate degree or skills-based certificate.
Total funding for the Michigan Reconnect Program would be $62.0
million GF/GP. House does not include.
10. Infrastructure, Technology, Equipment, Maintenance, and Gross $79,000,000 ($78,999,900)
Safety GF/GP $79,000,000 ($78,999,900)
Executive removes $79.0 million GF/GP Infrastructure, Technology,
Equipment, Maintenance, and Safety (ITEMS), which would allow public
universities to repair, improve, or maintain existing buildings, facilities,
equipment, technological and physical infrastructure, debt, and school
safety measures. House concurs but maintains $100 placeholder for the
program. Requires individual university allocations to be distributed
based on calculated FY 2022-23 fiscal year equated student (FYES)
enrollment. Allocations would not be distributed until January 2025.
11. Removal of FY 2023-24 One-Time Appropriations Gross $38,870,000 ($38,870,000)
Executive removes $38.9 million Gross ($8.9 million GF/GP) of one-time Restricted 30,000,000 (30,000,000)
funding that was included in the FY 2023-24 budget to support the GF/GP $8,870,000 ($8,870,000)
following:
• MSU Engineering and Digital Innovation Center ($30.0 million SAF)
• Critical Incident Mapping ($5.0 million GF/GP)
• Michigan Geological Survey ($3.0 million SAF)
• Michigan Technological University Bachelor of Science in Nursing
Program Creation ($870,000 GF/GP)
House concurs.
Major Boilerplate Changes from FY 2023-24
Sec. 236h. MPSERS One-Time Payment Detail – DELETED
Executive deletes language that details the $200.0 million one-time payment for MPSERS unfunded actuarial accrued
liability contributions to the system for the seven universities with MPSERS employees (Central, Eastern, Ferris, Lake
Superior State, Michigan Tech, Northern, and Western) and states payments will be distributed no later than September
30, 2023. House concurs.
Sec. 236j. Postsecondary Scholarship Fund Detail – REVISED
Creates the Postsecondary Scholarship Fund in the Department of Treasury. States money in the fund would require an
appropriation to be expended; provides that money in the fund at the end of a fiscal year does not lapse. Executive revises
language to include $330.0 million deposit into the fund for FY 2024-25 and deletes legislative intent language to increase
annual deposits into the fund by $50.0 million each year. House revises language to include $336.0 million deposit into
the fund for FY 2024-25 and revises legislative intent language to increase annual deposits into the fund by at least $30.0
million each year.
Sec. 236k. Fiscal Year Equated Student (FYES) Funding Floor – DELETED
Executive deletes language that details the one-year implementation of a $4,500 FYES funding floor for each university
below the per-student funding calculation. House concurs.
Sec. 236m. Infrastructure, Technology, Equipment, Maintenance, and Safety (ITEMS) Appropriation Detail –
REVISED
Executive deletes language that details infrastructure, technology, equipment, maintenance, safety and debt categories
that ITEMS funding could be used for by universities and language on program eligibility and distribution of funding. House
revises language to remove capital outlay project authorization as a restriction to receiving ITEMS funding and removes
restrictions for the University of Michigan - Ann Arbor.
House Fiscal Agency 4 5/8/2024
Major Boilerplate Changes from FY 2023-24
Sec. 236n. Tuition Incentive Program FY 2022-23 Supplemental Appropriation Detail – DELETED
Executive deletes language that increases FY 2022-23 funding for the Tuition Incentive Program by $2.5 million federal
TANF funding. House concurs.
Sec. 236o. Infrastructure, Technology, Equipment, Maintenance, and Safety (ITEMS) Certification and Payment
Detail – DELETED
Executive deletes language that details the certification process public universities must complete and have approved by
the state budget director in order to receive an ITEMS payment. House concurs.
Sec. 241c. University Tuition and Fee Restraint and Annual Rate Reporting Requirements – REVISED
Requires tuition and fee data to be submitted to the HEIDI database and a report of any revisions to tuition and fees within
15 days of adoption, and specifies tuition and fee restraint requirements in order to receive the operations increase and
FYES student floor funding for FY 2023-24, set at 4.5% or $676, whichever is greater. Executive revises language that
limits FY 2024-25 resident tuition and fee increases to 5.0% or $781, whichever is greater, and limits FY 2025-26 resident
tuition and fee increases to the greater of 5.0% and $820. House revises language that limits FY 2024-25 resident tuition
and fee increases to 4.5% or $703, whichever is greater and limits FY 2025-26 resident tuition and fee increases to the
greater of 4.5% and $735.
Sec. 24