Tuition increases cost Michigan $4.2 million in federal money

Because of deep cuts to college and university funding, Michigan will lose $4.2 million in federal funding this year. Congress created the penalty in 2009 to keep college tuition down. Last year, American college and tuition fees increased 8 percent while 41 states cut higher education funding.

U.S. Education Secretary Arne Duncan blames state budget cuts for tuition increases. To keep costs down, Duncan recommends making billions of dollars of campus-based student aid available if schools agree to reign in tuition and fee hikes. But many states--like Michigan--aren't necessarily looking at this money as an incentive.

To avoid losing the $4.2 million grant, Michigan would have to restore $58 million to higher education. Gov. Snyder proposes to offset part of the loss by spending $2 million in state funds to create a College Access Challenge grant award. The Legislature will have to approve the proposal.

Groups, like the Michigan College Access Network, benefits from the federal grant but will be appealing to private donors to help make up the loss.