Michigan House Bill HB5782

Michigan 2023-2024 Regular Session

• Introduced: 6/5/24
• Refer: 6/5/24
• Report Pass: 11/13/24

Caption

Higher education: financial aid; Michigan education trust act; modify. Amends secs. 4 & 8 of 1986 PA 316 (MCL 390.1424 & 390.1428).

Impact

By modifying sections 4 and 8 of the existing law, HB5782 aims to streamline the refund process for individuals who hold advance tuition payment contracts. The amendments include provisions that will allow these contracts to be terminated under specific circumstances such as the death of the beneficiary or failure to be admitted to a state institution. Additionally, the bill introduces measures for refund payments that would prevent the potential financial strain on the Michigan Education Trust Fund by ensuring refunds don’t exceed amounts justified by the prevailing tuition costs at public institutions.

Summary

House Bill 5782 proposes amendments to the Michigan Education Trust Act of 1986, altering provisions related to advance tuition payment contracts. This bill is specifically designed to impact how refunds are managed when a contract is terminated. Under the proposed amendments, the refund process will take into account the weighted average tuition cost at state institutions of higher education and establish clearer guidelines on when and how refunds can be disbursed to ensure compliance with regulations and maintain actuarial soundness.

Conclusion

Overall, HB5782 represents an important conversation about higher education financing in Michigan. The proposed changes could benefit the state's educational funding framework by ensuring sustainability and relevance in financial aid following changing educational landscapes. However, it is crucial to balance these financial imperatives with the needs and rights of students who depend on these programs for their education.

Contention

While the bill aims to improve clarity and operational efficiency, it may face scrutiny regarding its implications on beneficiaries' rights. Critiques may arise concerning the restrictions on refunds, especially for those who have completed significant coursework but still wish to terminate their contracts. Furthermore, the amendments could be viewed as undermining the original intent of providing flexible financial aid options for higher education, raising concerns among advocates for educational accessibility.