At least two states have been penalized by the federal Education Department for cutting their higher-education spending drastically in 2009, and two more are trying to forestall similar penalties.
The Education Department determined last year that Alabama and Michigan did not comply with a federal rule requiring states to provide consistent spending on higher education, and that therefore the two states do not qualify for federal grants meant to help low-income college students. The states appealed those decisions but were rejected.
The rule, enacted as part of the 2008 reauthorization of the Higher Education Act, says states must spend at least as much on colleges each year as they spent on average in the previous five years. States that fail to meet this “maintenance of effort” requirement can lose their eligibility for College Access Challenge Grants, a $150-million program that provides financial aid, academic counseling, and other assistance to students from low-income families.
Higher-education advocates in Michigan, which is losing a little more than $4-million, say the federal government is unfairly punishing the state, which was hammered by the economic downturn and had to meet a $6-billion revenue shortfall in 2009.
State officials also argue that the federal government should have counted $5-million in student financial aid that the state had redirected from a federal block grant.
“It is unlikely that either the lawmakers who approved that budget or the students who got those scholarships paused for a single minute to fret about which checking account the state used to pay the bill. But so far, that’s all federal officials seem to care about, ignoring how many students Michigan managed to help in the most difficult budget year in recent state history,” Brandy Johnson, executive director of the Michigan College Access Network, wrote in a statement.
Gov. Rick Snyder, a Republican, has said the state will use $2-million of its own money to make up for some of the lost grants, but he has balked at replacing the roughly $59-million in state higher-education spending that would be required to meet the federal maintenance-of-effort standard.
State officials in Alabama, which is losing a little more than $2-million, have responded similarly, saying that the state cannot afford the additional $36-million it would need to spend on higher education to meet the federal requirement.
Two other states, Iowa and Ohio, are still in negotiations with the Education Department, according to the department.
The four states were among 20 that fell short of the spending requirement. Nine of those were granted exceptions, said Jane Glickman, a department spokeswoman. Four others met the requirement by spending federal stimulus dollars on higher education, and the remaining three “made significant efforts to correct their violations,” she said.
