A greater percentage of Albion students are receiving federal welfare money than those in the neighborhood surrounding the campus.
At Albion, 63 percent of in-state students receive a Michigan Competitive Scholarship or a Michigan Tuition Grant, college aid the students themselves might be surprised to learn is funded almost entirely with federal anti-poverty money. This at a college in which the median family income of students receiving financial aid is nearly $76,000.
That rate is also more than double the percentage of Albion students who were awarded a Pell Grant in the 2013-14 school year, which go to U.S. college students coming from the poorest of family backgrounds.
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The use of federal welfare money to help more financially comfortable Michigan students attend pricey private schools is hardly confined to Albion.
Two-thirds of Michigan students at Calvin College benefit from welfare funds, even though the median family income of Calvin students getting financial aid is $85,000. Similar numbers emerge at Alma, Kettering, Hope, Olivet and other expensive schools.
In all, Michigan spends about $100 million annually in welfare money from Washington on college aid, including millions that benefit families earning over $100,000. This in a state in which only 18 of every 100 families living in poverty is receiving cash assistance.
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How Michigan came to redirect welfare money, known officially as Temporary Assistance for Needy Families, or TANF, to help pay the tuition at expensive, private schools has its roots in two seismic events of the recent past. First, welfare reform, passed during the Clinton Administration 20 years ago, which gave states broad discretion in distributing anti-poverty funds. Second, the great recession of 2008, which led Lansing to divert tens of millions of dollars in anti-poverty money to student aid.
But after a decade in which Michigan has slashed cash assistance to the poor, some question the state’s generous approach to funding student aid with welfare money.
“We shouldn’t be paying for financial aid for upper-income students with money that should be going toward making a more robust safety net for poor people,” said Peter Ruark, senior policy analyst for the Michigan League for Public Policy, a nonpartisan Lansing-based group that advocates for the poor, which gathered income data on families obtaining welfare aid.
All told, Michigan has spent a billion dollars in federal welfare money since 2007 on scholarship programs for college students, many at private colleges where annual tuition can exceed $40,000. About 60 percent of students who get the aid come from families with incomes above $50,000.
At the same time, the state has cut TANF spending that goes directly to cash assistance for the poor by over $500 million.
