(1) The funds appropriated in section 236 for Michigan achievement scholarships must be distributed as provided in this section and section 248a, pursuant to the administrative procedures for Michigan achievement scholarships of the department.

    (2) As used in this section:

    (a) “Department” means the department of treasury.

    (b) “Eligible institution” means a public university that receives an appropriation in section 236, a community college that receives an appropriation in section 201, a federally recognized tribal college in this state, or an independent nonprofit college or university in this state as described in section 1 of 1966 PA 313, MCL 390.991.

    (c) “Gift aid” includes federal Pell grants under 20 USC 1070a, tuition incentive program benefits under section 256, state tuition grants under section 252, awards received for minimum payments awarded in subsection (4), higher education expenses paid under the Michigan promise zone authority act, 2008 PA 549, MCL 390.1661 to 390.1679, and all other federal, state, local, or institutional aid in the form of grants, scholarships, or discounts applied toward tuition and mandatory fees. Gift aid does not include student loans, work-study awards, qualified withdrawals made from education savings accounts to pay higher education expenses pursuant to the Michigan education savings program act, 2000 PA 161, MCL 390.1471 to 390.1486, or higher education expenses paid under the Michigan education trust program pursuant to the Michigan education trust act, 1986 PA 316, MCL 390.1421 to 390.1442.

    (d) “High school equivalency certificate” means that term as defined in section 4.

    (3) An individual must meet all of the following criteria and financial thresholds each year to be eligible for a Michigan achievement scholarship awarded under this section:

    (a) Be a resident of this state for at least the immediately preceding year.

    (b) Have graduated from high school in this state with a diploma or certificate of completion or achieved a high school equivalency certificate in 2023 or after.

    (c) Be a full-time undergraduate student at an eligible institution, as defined by that eligible institution, and be a first-time enrollee in an eligible institution during the 2023-2024 academic year, or a subsequent academic year, within 15 months after high school graduation or attainment of a high school equivalency certificate or have received a Michigan achievement scholarship in a previous academic year. For the purposes of this subdivision, participation in a dual enrollment, early college, or other similar program while attending high school does not disqualify a student from being considered a first-time enrollee.

    (d) Maintain satisfactory academic progress, as defined by the eligible institution in which the student is enrolled.

    (e) Not be incarcerated in a corrections institution.

    (f) Not be in default on a federal student loan.

    (g) For awards made during academic year 2023-2024, complete the Free Application for Federal Student Aid and have an expected family contribution of $25,000.00 or less. For awards made during academic year 2024-2025 or a subsequent academic year, except as otherwise provided in this subdivision and subdivision (h), complete the Free Application for Federal Student Aid and have a student aid index number of 1 of the following, as applicable:

    (i) For a student indicating on the student’s Free Application for Federal Student Aid that the student is the only member of the student’s household or the student’s parents’ household attending a postsecondary institution during that academic year, $30,000.00 or less.

    (ii) For a student indicating on the student’s Free Application for Federal Student Aid that the student is not the only member of the student’s household or the student’s parents’ household attending a postsecondary institution during that academic year, the greater of the number described in subparagraph (i) or a number determined by the department of treasury. For the purposes of this subparagraph, the department of treasury, in collaboration with the state budget office and the house and senate fiscal agencies, may calculate a student aid index number or may issue administrative guidance for the student aid index eligibility of students with more than 1 member of the student’s household or the student’s parents’ household attending a postsecondary institution during that academic year. It is the intent of the legislature that the utilization of a student aid index instead of expected family contribution does not adversely impact the eligibility of students with multiple members of the student’s household or the student’s parents’ household in college.

    (h) For the purpose of determining eligibility under subdivision (g), an individual is considered to have met the requirements of subdivision (g) if the individual received the Michigan achievement scholarship in academic year 2023-2024, was determined to have an expected family contribution of $25,000.00 or less in academic year 2023-2024, and has completed the Free Application for Federal Student Aid for the subsequent award cycles.

    (i) The legislature finds and declares that the student aid index thresholds in subdivision (g) are temporary and intended to apply only for academic year 2024-2025. It is the intent of the legislature that the legislature and executive branch work collaboratively to use Michigan achievement scholarship uptake and other relevant data to establish a more permanent measure of financial need for the Michigan achievement scholarship for subsequent academic years.

    (j) Apply for all available gift aid for each academic year in which the individual applies for a Michigan achievement scholarship.

    (4) Michigan achievement scholarships are subject to all of the following:

    (a) Subject to section 248a(3)(f)(i), an eligible student may receive an award under this section or section 248a for a maximum of 5 academic years, not more than 3 of which may be for attending eligible institutions that are community colleges or federally recognized tribal colleges unless the student is enrolled in a baccalaureate degree program described in section 121 of the community college act of 1966, 1966 PA 331, MCL 389.121. A student may not receive an award under this subsection and section 248a(3)(f)(i) during the same academic year.

    (b) The amount awarded to an eligible student at an eligible institution that is a community college or federally recognized tribal college must equal the sum of following:

    (i) A minimum payment of $1,750.00, which is comprised of a base payment of $1,000.00 plus an additional payment of $750.00.

    (ii) The lesser of $1,000.00 or the student’s last-dollar payment amount.

    (c) The amount awarded to an eligible student at an eligible institution that is a public university or enrolled in a baccalaureate degree program described in section 121 of the community college act of 1966, 1966 PA 331, MCL 389.121, must equal the sum of following:

    (i) A minimum payment of $2,500.00, which is comprised of a base payment of $1,000.00 plus an additional payment of $1,500.00.

    (ii) The lesser of $3,000.00 or the student’s last-dollar payment amount.

    (d) The amount awarded to an eligible student at an eligible institution that is an independent nonprofit college or university must equal the sum of the following:

    (i) A minimum payment of $1,000.00.

    (ii) The lesser of $3,000.00 or the student’s last-dollar payment amount.

    (e) Money awarded under this subsection for a Michigan achievement scholarship must be paid to the eligible institution for credit to the student’s account.

    (f) As used in this subsection:

    (i) “Last-dollar payment amount” means an amount equal to the tuition, mandatory fees, and contact hours for each student’s actual program of study, minus all gift aid received by the student.

    (ii) “Minimum payment” means a payment eligible for any cost within the student’s individual cost of attendance. The minimum payment must be awarded as a separate payment not included in the student’s need-based financial aid. The minimum payment must not be reduced.

    (5) The department shall work closely with participating institutions to provide the highest level of participation and ensure that all requirements of the program are met.

    (6) From the funds appropriated in section 236(7) for the Michigan achievement scholarships, the department may not use more than $10,000,000.00 for the purposes of outreach programs to raise awareness of the Michigan achievement scholarship described in this section and section 248a and shall ensure that Michigan achievement scholarships are well publicized and that high school students are provided information on the program. The department may receive and expend funds received from outside sources for scholarships, marketing, or other purposes related to the Michigan achievement scholarship. The department shall provide the necessary funding and staff to fully operate the program.

    (7) The department shall convene a workgroup during the fiscal year ending September 30, 2024 to consider and advise the department on implementing policies for administering the Michigan achievement scholarship. The workgroup shall include participation from the Michigan Association of State Universities and its institutional members, the Michigan College Access Network, the Michigan Community College Association and its institutional members, the Michigan Independent Colleges and Universities and its institutional members, and any other interested stakeholders and offices as determined by the department. The workgroup shall make recommendations on packaging order, packaging structure, definitions of terms not otherwise defined in statute, and other administrative regulatory requirements as necessary to implement the Michigan achievement scholarship.

    (8) The following reporting obligations apply to the Michigan achievement scholarship program:

    (a) By May 1 and December 1 of each year, the department shall provide a written report, organized by eligible institution, to the house and senate appropriations subcommittees on higher education, the house and senate fiscal agencies, and the state budget director that includes the following information for the previous academic year:

    (i) The number of students who qualified for a Michigan achievement scholarship.

    (ii) The number of students who received a Michigan achievement scholarship.

    (iii) The average number of credits earned by students who received a Michigan achievement scholarship.

    (iv) The number of Michigan achievement scholarships that were canceled due to failure to maintain satisfactory academic progress under subsection (3)(d).

    (v) The number of Michigan achievement scholarships that were canceled due to a student ceasing attendance at an eligible institution. The number must not include any known transfers to another eligible institution.

    (vi) The number of Michigan achievement scholarships that were canceled due to a student’s failure to maintain full-time status.

    (vii) The average Michigan achievement scholarship award per student, delineated by sector, including community colleges, tribal colleges, public universities, independent colleges and universities, and training institutions. As used in this subparagraph, “training institutions” means training institutions accepted to participate in the Michigan achievement scholarship program under section 248a.

    (b) Each eligible institution whose students receive awards under this section shall cooperate with the department in a timely manner to facilitate the creation of the report under subdivision (a).

    (9) Beginning April 1, 2024, by April 1 of each year, each eligible institution shall submit a report to the department, the state budget office, and the house and senate fiscal agencies providing information as to the total institutional grant aid per full-year equated undergraduate student for the current institution fiscal year and for the immediately preceding 3 institution fiscal years. If the institution does not maintain total institutional grant aid per full-year equated undergraduate student at the average amount provided over the immediately preceding 3 institution fiscal years, the institution must include in the report a description of changes to institutional finances or the student population that prevented the institution from maintaining support for institutional aid. An institution’s report of total institutional grant aid per full-year equated undergraduate student pursuant to this subdivision must be consistent with data most recently reported to the Integrated Postsecondary Education Data System.

    (10) For each fiscal year, an eligible institution becomes ineligible for funding under this section if, in the immediately preceding fiscal year, the institution exceeds 1 of the following tuition restraint requirements, as applicable:

    (a) For an eligible institution that is a community college, the tuition restraint described in section 217b.

    (b) For an eligible institution that is a public university or independent nonprofit college or university, the tuition restraint described in section 241c.

    (11) It is the intent of the legislature that an eligible institution will not make reductive changes to scholarship or financial aid programs offered by that eligible institution that have the goal or net effect of shifting the cost burden of those programs to the program described in this section.