The Legislature reached a preliminary agreement to cut $1.2 billion from the budget Wednesday, the Detroit Free Press reported, but the fate of the scholarship remains uncertain. The Michigan Promise Scholarship awards college students up to $4,000 toward in-state college or university tuition based on results from the Michigan Merit Exam. Those who are eligible for the Michigan Promise Scholarship would receive any remaining money as a Michigan income tax credit after graduation if they remain in the state. Some state Democrats, however, said the measure might not be needed, as they are fighting to keep the scholarship.

“Whether we keep all or part of the promise, or anywhere in between, the student gets reimbursed,” Horn said.

Graduates could fill out their tax forms at the end of 2010 and, by April 15, receive their first tax credit, he said.

“The basic premise is, you owe nothing to the state as long as the state owes money to you,” Horn said.

Depending on a graduate’s income level, the time it takes to be completely paid back will vary, he said. The catch, however, is students working outside Michigan would not receive the credit. It instead will “carry forward.” If someone lives outside Michigan for a long time, the credit still will apply when he or she comes back, he said.

“If (they) went away for a while and came back, the credit would be waiting,” Horn said.

But the Michigan Legislature has not given up on the Michigan Promise, said state Rep. Joan Bauer, D-Lansing.

“My position is, and it continues to be, that this year it should be a budget priority,” she said. “I have not wavered in my support of funding the Michigan Promise.”

More than 7,700 MSU students are eligible to receive the scholarship during the 2009-10 school year.

“We need to get this funded this year. If for some reason we can’t get the support to do so, then I would be interested in this proposal,” Bauer said.

For some students, the scholarship’s elimination might make higher education unattainable, communication junior Colleen Keehn said.

“Those who don’t have enough (money) to go to college would just be deterred more from going,” she said.

And some lawmakers fear the bill could change the purpose of the Michigan Promise Scholarship.

“It does shift the focus,” Bauer said. “The goal is to encourage young people to go to college, to make college more accessible and more affordable.”

But the bill’s future depends on the future of the scholarship in the state’s budget. If the scholarship is eliminated in the budget, Horn’s bill will continue through the House. The goal of the tax credit is to protect students regardless of what might be cut from the budget, Horn said. Keeping the promise in some fashion is the most important thing, even if it isn’t the most desirable option, he added.

“Michigan’s No. 1 export should not be college-educated kids. … This is plan B,” Horn said.