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How welfare money funds college scholarships

Students at a college in Michigan play soccer while cocooned in plastic bubbles. Caitlin Esch/Marketplace

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There is an affordability crisis in higher education, and states are actively seeking ways to help students attend and pay for college. One approach in Michigan: a long-standing state program that provides three types of scholarships. For recipients, it’s a helpful state program that eases the financial burden of college. 

For budget experts, however, it’s a curious case of how federal welfare money has been redirected since the 1996 welfare reform law created a program called Temporary Assistance for Needy Families. Publicly available data show that Michigan spends the greatest chunk of its welfare money on out-of-wedlock pregnancy prevention, about 33 percent of the $700 million it receives from federal government each year. What does reducing unmarried pregnancy have to do with higher education?

Turns out, just under $100 million of that federal welfare money goes toward college scholarships for Michigan students. Not just low-income students. Half of the scholarship money is available to middle and upper-middle class families. And yet, Michigan spends just a little more  $167 million in state and federal funds on traditional welfare checks for poor families.

In an excerpt from Krissy Clark’s podcast, The Uncertain Hour, we take a trip to Adrian College in Southeastern Michigan to hear from students who  unbeknownst to them  are on welfare. 

How does your state spend its welfare dollars? Find out with Marketplace’s database, Your State on Welfare


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