What Happened?
MICHIGAN’S 2011 COLLEGE ACCESS CHALLENGE GRANT AND
MAINTENANCE OF EFFORT WAIVER DENIAL
2012 MCAN CONFERENCE
APRIL 30, 2012
TOM FREELAND, MDE COLLEGE ACCESS & OUTREACH
BRANDY JOHNSON, MICHIGAN COLLEGE ACCESS NETWORK
CHUCK WILBUR, PUBLIC POLICY ASSOCIATES
History of College Access Challenge Grant
 2007: President Bush signed the College Cost Reduction
and Access Act (CCRAA) into law, amending the Higher
Education Act of 1965
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Created the College Access Challenge Grant (CACG) program
Two year grant block grant program – FY2008 and FY2009
Formula based on number of youth residents and percentage of
residents living below the federal poverty line.
Total Allocation: $66 million in FY2008 and FY2009
Michigan’s Allocation: $2.1 million in FY2008 and FY2009
 2010: President Obama signed the Health Care and
Education Reconciliation Act of 2010.
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Extended the program for FY2010-2014
More than doubled the funding to $150 million per year
College Access Challenge Grant
 Purpose: Foster partnerships among federal, state,
and local governments and philanthropic
organizations through matching challenge grants
that are aimed at increasing the number of lowincome students who are prepared to enter and
succeed in postsecondary education.
 Michigan’s Award: $4,268,548/year in FY10-14
Michigan’s College Access Challenge Grant
 CACG 1.0 (2008-2010)
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Major deliverable: Create a community to support greater
collaboration among college pathway professionals in Michigan.
 CACG 2.0 – Year 1 (2010-2011)
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Major deliverables:
MDE College Access and Outreach Unit
 MichiganCAP
 Michigan College Access Network
 Local College Access Networks Grant Programs
 KnowHow2GO Michigan
 Michigan Campus Compact College Positive Volunteerism
 Michigan College Advising Corps
 Promise Zones
 Achieving the Dream
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Maintenance of Effort Requirement
Requires states to maintain spending for higher
education at least at the average amount spent over the
past five years: (a) for public institutions (excluding
capital expenses and research and development costs);
and (b) for private institutions (as measured by
financial aid/scholarships for students attending
private colleges).
Waiver Authority
The Secretary of Education has the authority to waive
the MOE requirement if it is determined that such a
waiver would be equitable due to exceptional or
uncontrollable circumstances, such as a natural
disaster or a precipitous and unforeseen decline in
financial resources of a State.
Michigan’s Maintenance of Effort Waiver Application
May 2011
Michigan did not meet Maintenance of Effort in FY 11
State spending on higher education in FY10 was less
than previous 5-year average (FY05-09)
Michigan applied for a waiver of MOE requirement
Michigan’s Waiver Application Denied
September 2011
 Received letter indicating that Michigan’s CACG
MOE waiver was functionally denied.
 FY11 funds will only be made available to Michigan if
it restores $58 million (to get a $4 million grant).
 In September, 10 other states also had their waivers
denied.
Secretary Duncan has discretion to reconsider
September 2011-Feburary 2012
MCAN began organizing state and national efforts to
reverse waiver denial decision
Advocacy Efforts
 Major Philanthropic Organizations
 Michigan Congressional Delegation
 Media / Op-Eds
Advocacy Talking Points
 Ask Secretary Duncan to reconsider Michigan’s waiver
application
 Michigan has put its CACG to good use
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We did not use it to supplant state efforts
We leveraged millions of $ in philanthropic support
We are helping President Obama and Secretary Duncan reach their
2020 Goal.
 Michigan did not meet MOE because our state faced
“exceptional and uncontrollable” financial circumstances
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Near collapse of manufacturing industry
We are using CACG to mitigate our state’s economic circumstances
In theory, Maintenance of Effort provisions in federal
legislation is good public policy…
 Obama’s 2020 Goal
 State Financial Responsibility: Supplant v.
Supplement
 It worked for other federal education programs
…but the implementation of MOE
is bad public policy for CACG
 Counterproductive to Obama’s 2020 goal if funds
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revert back to Treasury
Doesn’t take into account relevant qualitative factors
Doesn’t take into consideration how state is using
funds (i.e. to mitigate painful cuts)
Pushes out philanthropic investments
Punishes states who preserved social safety nets
Policy lever doesn’t work for a very small program
Creates inequities between states
Mathematical Strategy
 U.S. Department of Education used “proportionality”
test to determine which states got waivers.
 MDE worked with State Budget Office to
demonstrate that Michigan did not cut higher
education spending at a higher level than other state
spending with the help of SFSF dollars.
 Michigan maintained $39 million for private
scholarships but used TANF dollars instead of GF.
Waiver Request 2.0
 In November, Superintendent Flanagan submitted a
revised MOE Waiver Application.
 Key Arguments:
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Duncan has authority to grant waiver based on our exceptional
or uncontrollable economic conditions in FY10.
“Proportionality” test had not been communicated to State
when FY10 budget was being set.
Michigan committed $68 million in SFSF to higher education
spending and therefore we met the “public” test.
State lawmakers saw GF and TANF as fungible resources
1 of only 5 states that maintain a scholarship program for
students attending private institutions.
Final Decision
 In late February, U.S. Department of Education sent
Michigan a final determination letter indicated
Michigan would not receive a waiver.
 Three other states (Alabama, Iowa, and Ohio)
received a similar letter.
 Michigan could not overcome “TANF Swap” issue for
private Tuition Grant.
Still Fighting for Waiver for 2012
 If waiver approval process remains the same,
Michigan will likely not qualify for one in 2012 or
2013.
 Members of Congress and National Governors
Association have asked U.S. Department of
Education to consider modifying waiver process.
 So far, U.S. Department of Education has not budged
Refer to Attachments
 Original Denial Letter
 Kresge Letter to Secretary Duncan
 Michigan Congressional Delegation Letter
 Follow-up Letter from Superintendent Flanagan to
Duncan
 Op-Ed on CACG MOE Waiver
 Final Denial Letter
 Letter from U.S. Senate
Questions?
Tom Freeland, freelandt@michigan.gov
Brandy Johnson, brandy@micollegeaccess.org
Chuck Wilbur, cwilbur@publicpolicy.com