Newstrack: Financial aid for Board of Regents students climbs with tuition

Background

The volume of financial aid for students attending Iowa's public universities has been ticking up for years, topping $1 billion in the 2013-2014 academic year for the first time in Board of Regents history.

The board's report of that historic occurrence last year noted financial aid for its students in the form of loans, grants, and on-campus employment had increased by $126 million — or 14.3 percent — since the 2009-2010 school year.

That news came amid local and national debate around rising student debt and higher education costs. And months later, in response to less state funding than requested, the board approved tuition increases for resident undergraduate students — rates regents had managed to keep frozen for an unprecedented three consecutive years.

The rate hike, which amounted to annual increases of $200, was scheduled to start in spring 2016 for Iowa State University and University of Northern Iowa students and in the upcoming fall semester at University of Iowa.

Because state appropriations again fell short of regent funding requests during the legislative session that just ended, the board is moving toward another across-the-board tuition hike — one that would add to last year's increase, which UI students haven't yet felt.

The board is scheduled to vote on the second round of tuition increases — amounting to $300 for resident undergraduates — at its July 18 meeting.

What's happened since

The board earlier this month issued a new report showing financial aid has reached a new historic high of $1.03 billion in the 2014-2015 school year. That represents an increase of $21.4 million — or 2 percent — from the previous year.

And it's up 6.6 percent — or $63.7 million — from the 2010-2011 school year.

Aid through loans decreased by about $3.1 million, and grant, scholarship and employment funds increased. But student loans still account for the biggest portion of the financial-aid pie, according to the new report.

'Loans continue to play a major role in the student financial aid packages of regent university students,' according to the board's report. 'However, studies have shown that loans typically do not promote college enrollment.'

Rather, loans can influence college selection and success, according to the report, which cited a 2013 study showing every $1,000 in unsubsidized federal loans makes low-income students nearly six percent less likely to graduate in six years.

The new report does indicate a shift in student behavior, showing total annual education borrowing on the decline. Students borrowed 6.6 percent less in the 2014-2015 school year than in 2011-2012, according to the report.

And, the board report states, 'Students have assumed more reliance on employment while in school.'