Michigan Promise likely broken as financial aid appeals hit record levels

Statewide, 96,000 undergraduates stand to lose as much as $4,000 each for college.

Michigan lawmakers have until midnight Sept. 30 to hammer out a state budget.

Last year, Washtenaw Community College, Eastern Michigan University and the University of Michigan fronted the cash for Promise recipients and were later reimbursed by the state. This semester, students at the local institutions have to pay what those scholarships would have provided or apply for more aid if they don't have it.

At WCC, 660 students stand to lose Promise money; at EMU, about 1,700 students; and at U-M, 6,096 students.

Cynthia Van Pelt, EMU's financial aid director, said her office sent two e-mails to let students know the program could be scrapped. But complaints about losing that money have been few and far between.

Van Pelt said she expects to hear more about the Promise grants when fall bills must be paid in November.

"They're encouraged to pay the bill if they can, and if they aren't able to and need money now, they can contact us to see if they're eligible for additional student loan funding," Van Pelt said. "Not everyone can get a student loan increase. The federal government has limits on how much a student can receive in any year, and some students are already at that limit."

At the same time, hundreds more families are reporting last-minute losses of income, Van Pelt said, including some whose yearly incomes have plummeted from from six figures to zero.

The number of loss-of-income appeals filed at EMU through last week exceeds the number of appeals filed over the entire 2008-2009 school year, Van Pelt said. So far this fall, the financial aid office received 330 appeals; all of last year, only 260 appeals were filed, Van Pelt said.

After an appeal is filed, a committee re-examines the student's financial aid package and determines whether he or she is eligible for more funding.

In-state undergraduate tuition and fees at EMU is $8,377.

Almost 700 students at WCC might feel the loss of Promise grant money more sharply - scholarships have covered a large amount of some local students' $1,920 yearly tuition, said Lori Trapp, financial aid director.

Beginning in 2007, students who met or exceeded state standards on the Michigan Merit exams could earn $1,000 during their freshman year and $1,000 in the sophomore year from Promise grants. Students have to maintain a 2.5 grade point average by end of their sophomore year to receive the remaining $2,000.

"I did talk to a few students," Trapp said. "For us, that $1,000 covers a semester's tuition and books. Students have had to come up with other means to pay. Maybe they got a loan or are eligible for other grants, I don't know."

At WCC, appeals for more financial aid are four times higher than last year; about 100 students have filed appeals so far, Trapp said.

At U-M, where in-state undergraduate tuition and fees cost $11,659 a year, spokesman Rick Fitzgerald said financial aid appeals are up 30 percent to 40 percent.

Though they may lose out on state, merit-based Promise money, some of the same students might qualify for additional Pell Grant funding from the federal government - if they show enough need. The American Recovery and Reinvestment Act increased Pell Grant funding by $17 billion, increasing the maximum award from $4,850 to $5,350.

Financial aid offices have doled out millions more in Pell Grants this year, directors say, and more students have qualified since the program was expanded this year.

But not all students who may lose out on the merit-based Promise grants are eligible through the expanded Pell Grant program. At U-M, for example, only 1,717 of 6,096 students who were to be awarded Promise money demonstrate financial need.

The Associated Press contributed to this report.

Juliana Keeping covers higher education for AnnArbor.com. Reach her at julianakeeping@annarbor.com or 734-623-2528. Follow Juliana Keeping on Twitter