Board of Regents begins planning the end of tuition set-aside policy

BY ALEX SHEETS | JUNE 07, 2012 6:30 AM

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After fielding a slew of complaints from state legislators and the public, the state Board of Regents now has plans to eliminate its tuition set-aside policy within five years.

At the regents' Wednesday meeting, Regent President Craig Lang called for the end of the current policy to set aside tuition for student aid at Iowa's state universities.

The regents discussed alternative sources for student aid, including working more with university foundations to increase donations and focusing more on outreach to donors. Lang said it would take $35 million in state funding to make up for the tuition set-aside dollars now going to student aid.

The regents all expressed interest in eliminating the tuition set-aside program, and they voted unanimously to continue discussion on the topic.

Though the regents plan to phase out the program within five years, there is no set ending date for the policy. Lang asked that a state program be initiated with assistance from the regent universities.

"If it can be done quicker, then we certainly will do it quicker … in the right ways," Lang said.

Regents passed the tuition set-aside policy in September 2004, requiring each of the three state regent universities to set aside a minimum of 15 percent of gross tuition proceeds to go to need- and merit-based financial aid for graduate and undergraduate students.

The regent universities averaged 21.3 percent of tuition set-aside in fiscal 2011.

Roughly $144.4 million went toward student financial aid, and 25,583 students were helped, including students out-of-state and not under financial duress.

Rep. Dave Jacoby, D-Coralville, said he was pleased to see the regents recognize that tuition set-aside is not the answer.

"Sounds to me like the regents understand the need for tuition assistance," he said. "[The] big question is if we can get across-the-board support from the Legislature."

Regent Bruce Rastetter noted that university officials will have to ask legislators, as well as Gov. Terry Branstad, for help in the process.

As the schools work toward elimination of the set-asides, Rastetter said the regents need to make assisting students with tuition costs a priority until they identify a long-term solution.

"[We need] to make sure we maintain access for students in need," he said.

Regent Katie Mulholland acknowledged that eliminating the policy would pose a "tremendous challenge."

There is no guarantee tuition costs will be lowered if the policy is eliminated, Rastetter said. Rather, the money going toward need- and merit-based student aid will be substituted for something else.

The regents will hear a preliminary report from the financial aid committee during their September meeting.

Jacoby said he is hopeful eliminating the tuition set-aside will happen in the near future.

"If there's some kind of partnership with the Legislature and the foundations, I think we can get it done," he said.

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