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Experts: Public universities depending more on tuition revenue

BY CHASTITY DILLARD | APRIL 19, 2012 6:30 AM

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Though higher-education experts say tuition dollars set aside for financial support is common nationwide, Iowa Republican legislators are arguing it's an unfair practice for university students.

Yet, the state Board of Regents and other officials say without tuition set-asides — which redistributes tuition dollars to finance scholarships often to disadvantaged students — some students would be unable to attend the regent schools. According to the regents' office, 24 percent of all tuition paid in fiscal 2011 by state residents enrolled at the University of Iowa went toward need and merit-based scholarships.

"These funds help facilitate the enrollment of a well-prepared, high achieving, and diverse student body," UI Director of Student Financial Aid Mark Warner wrote in an email.

Eric Kelderman, a staff reporter for the Chronicle of Higher Education, said set-aside dollars are the norm at most public and private universities.

"Universities do a lot of things to try to maximize their revenues and, at the same time, keep up with the economy," Kelderman said.

Last week, Republican lawmakers decried state use of the decades-old practice — some declaring the exercise's lack of transparency as a main issue.

"I'm just stunned that this practice would have been concealed from the people, parents, and some individual students, writing [tuition] checks for so many years," said Sen. Steve Kettering, R-Lake View.

He said the effect will go beyond a four-year education for those who must pay back loans.

And though reports on set-aside funds are included in the regents' agendas, Rep. Scott Raecker, R-Urbandale, said students should be more informed about where their tuition goes.

"But the students paying the bills were not disclosed information," Raecker said. "I think they should know that 24 percent of [their tuition] is going to another student."

In fiscal 2011, roughly 20 percent of the UI total tuition collected was awarded to students through set-aside funds, according to the regents. Compared with the 24 percent of in-state tuition dollars given as scholarships, roughly 18 percent of out-of-state tuition contributed to award money that same year.

The regents require their universities to set aside a minimum 15 percent of all tuition to scholarship distribution. Yet Regent President Craig Lang said he's open to re-examining the amount dedicated to set-aside funds.

"I'm shocked by how much it has grown," Lang said. "Once it had grown from 15 percent to 24 percent, we really needed to have a public discourse about providing affordable education for all."

Jane Wellman, the executive director of the National Association of System Heads, said in a perfect world, there would be public funds in place of set-aside dollars going toward tuition.

"But if those funds aren't there, I'd rather they fund [scholarships] from tuition revenues than not fund [scholarships] at all," she said.

Though never having heard of the tuition set-aside concept, UI senior Kyle Francois said it's an interesting issue.

"It's important that people can afford school," he said. "But at the same time it seems counterproductive to take one student's money and give it to another."

Kelderman said to keep in mind legislators, like the general public, aren't experts on higher-education funding.

"[Lawmakers] don't know not because they are willfully stupid," he said. "It's just they don't know the funding at the micro level."

Stacey Christensen, a spokeswoman for the University of Northern Iowa, said the funding is essential to bring in all varieties of students.

"I don't believe we look at it as hurting students," she said. "We look at it as making our university stronger by making it so students who might not have the opportunity to come to the university have the financial support."


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