Bill Text: MI SB0664 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Higher education; financial aid; tuition payment program in which repayment is based on a percentage of graduate's income for certain number of years after graduation; authorize the submission of a proposed pilot program. Creates new act.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2015-12-10 - Referred To Committee On Appropriations [SB0664 Detail]

Download: Michigan-2015-SB0664-Introduced.html

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SENATE BILL No. 664

 

 

December 10, 2015, Introduced by Senator YOUNG and referred to the Committee on Appropriations.

 

 

 

     A bill to require the department of education to consider

 

submitting to the legislature of this state a proposed pilot

 

educational grant program for resident students attending certain

 

public institutions of higher education in this state.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1. This act shall be known and may be cited as the "pay

 

forward, pay back educational grant act".

 

     Sec. 2. The legislature finds and declares all of the

 

following:

 

     (a) Higher education has expanded opportunities for residents

 

of this state to qualify for high-quality jobs and entry into the

middle class, providing clear benefits to this state's economy.

 

     (b) There exists in this state a continuing rise in tuition

 

and fees charged by institutions of higher education.

 

     (c) Financial aid programs for higher education are inadequate

 

to reach all students with financial need in this state.

 

     (d) The increasing unaffordability of a higher education has

 

forced students to borrow more money to pay for higher education,

 

causing many to be left with significant amounts of student debt.

 

     (e) High levels of student debt are not only damaging to the

 

individual student's ability to succeed financially but also will

 

have grave consequences for the future economy of this state.

 

     (f) This state must increase its contribution to the funding

 

of public higher education.

 

     (g) There is an immediate need to seek another approach to

 

financing the student's share of the cost of public higher

 

education in this state that will not result in students graduating

 

from this state's public institutions of higher education burdened

 

with debt.

 

     (h) There is a growing interest in a new financing strategy

 

known as pay forward, pay back.

 

     (i) It is in this state's best interest to study and recommend

 

a potential pay forward, pay back program.

 

     Sec. 3. As used in this act:

 

     (a) "Department" means the department of education.

 

     (b) "Public institutions of higher education" means both of

 

the following:

 

     (i) A community college organized under the community college

 

act of 1966, 1966 PA 331, MCL 389.1 to 389.195, or under part 25 of

 

the revised school code, 1976 PA 451, MCL 380.1601 to 380.1607.

 

     (ii) A university described in section 4, 5, or 6 of article

 

VIII of the state constitution of 1963.

 

     Sec. 4. (1) The department shall consider the creation of a

 

proposed pilot program, called pay forward, pay back, that would do

 

the following:

 

     (a) Identify 1 or more public institutions of higher education

 

that have agreed to participate in the pilot program.

 

     (b) At those identified institutions, replace the current

 

practice of resident student borrowing to pay for tuition and fees

 

with the financing strategy outlined in subsections (3) and (4).

 

     (2) If the department determines that a pilot program is

 

warranted, the department shall submit a proposed pilot program to

 

the legislature of this state by no later than June 30, 2016.

 

     (3) If submitted, the proposal shall describe the details of a

 

pilot program that will accomplish the following:

 

     (a) Allow students who are residents of this state, as defined

 

by the institution of higher education, and who qualify for

 

admission to the institution to enroll in the institution without

 

paying tuition or fees.

 

     (b) Establish a process by which this state disburses grant

 

money to the institution of higher education to pay for those

 

tuition and fees on behalf of those students.

 

     (c) Provide that, in lieu of paying tuition or fees, each

 

student must sign a binding contract to pay to this state a certain

 

percentage of the student's annual adjusted gross income upon

 

graduation from the institution for a specified number of years.

 

     (d) Specify the number of years and the percentage of annual

 

adjusted gross income for contracts applicable to each

 

participating institution of higher education and base the

 

specifications on research to date.

 

     (e) Establish an immediate funding source for the first 15 to

 

20 years of the pilot program and include the establishment of a

 

revolving fund to deposit payments made under the pilot program.

 

     (4) A proposed pilot program may vary by institution of higher

 

education depending on the following:

 

     (a) The total cost of education at the institution.

 

     (b) The portion of the cost that is paid by this state.

 

     (c) The number of years specified in the contract.

 

     (d) The percentage of annual adjusted gross income specified

 

in the contract.