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Financial Aid:

When studying racial inequality of education at universities like the University of Michigan, it is important to take into account financial aid distribution. Tuition in the US is very expensive (although it varies by institution) and many students rely on financial aid to attend school. Roughly $46 billion in student financial aid is handed out every year. This is a combination of federal aid, institutional aid, and third party scholarships. The University of Michigan itself gave out a total of over $1 billion in financial aid awards for undergraduate and graduate students combined during the 2017-2018 school year. There is a lot of data that shows the distribution of aid based on yearly family income and how need based decisions are made. However, this data does not give any indication of whether financial aid contributes to racial inequality of education.

Does the distribution amounts of financial aid differ for different ethnicities and does this contribute to racial educational inequality at universities, specifically the University of Michigan? The data on financial aid amounts given to different racial/ethnic identities at the University of Michigan is either limited or not publicly available. The financial aid office at the University of Michigan does not keep records on the ethnic identities of students receiving financial aid at the University. This is in order to comply with Michigan’s proposal 2, part of which prohibits the awarding of financial aid based on ethnic identities.

Proposal 2

Proposal 2 (Michigan Civil Rights Initiative) was voted into Michigan law in 2006. Once voted in it was written as an official amendment to the state of Michigan constitution. The purpose of the initiative was to end the practice of using race, gender, and sexuality in determining entrance into educational institutions and the workforce. This essentially prohibited the use of affirmative action programs in the state of Michigan. Although the language of this law (as it pertains to higher education) is written around admissions processes, it has had effects on institution’s disbursement of financial aid.

The passing of this amendment prohibited discriminatory practices, meaning that institutions like the University of Michigan could not hand out financial aid awards based on race, gender, or sexuality. This means that scholarships specifically for minorities were now eliminated. This includes scholarships whose criteria included being African American, Latino, Native American, etc. Although this proposal prevented discrimination based on race, it also limited aid programs aimed towards providing equal opportunity for typically disadvantaged minority groups. Many of these groups rely on aid packages to abate the high cost of tuition at public universities in order to attend and graduate. Studies have shown that dropout rates improve drastically for minorities proportional to the size of grants they recieve for school, primarily Pell Grants. The dropout rate for white students remains relatively the same, regardless of the size of grants received.