Rauner says spending $721 million on MAP grants and community college operations "would explode the State's budget deficit."
Illinois is nearing the end of its eighth month without any budget.
Certain social services, as well as higher education, are taking the brunt of the impasse. There are reports of students looking to go out of state for school.
Thursday, the governor called that "tragic."
"I would encourage the students to stay and see if they can be patient and persistent along with us," he said.