Regents: Tuition set-aside to get full discussion in June

 If the tuition set-aside program at Iowa's regent universities is eliminated, it would not automatically lead to a decrease in tuition and it could lead to a decline in tuition revenue to the schools, a regents official said today.

Losing the tuition set-aside program, which has come under scrutiny from some lawmakers in recent weeks, could mean losing students who receive aid through the program. That would lead to a drop in revenue at the University of Iowa, Iowa State University and the University of Northern Iowa, regents Chief Business Officer Patrice Sayre told the state Board of Regents.

Ending the program, which provides scholarship money to more than 25,500 undergraduate students at the three schools, also could mean declines in retention and graduation rates, an increase in student debt and a narrowing of diversity on the campuses, Sayre said. If the program were ended, money now used for the set-aside scholarships could be directed to other budget areas at the universities, she said.

The average tuition set-aside grant to a resident student was $3,944 last year.

State regents will spend a "good deal of time" discussing tuition set-aside at the board's June meeting,  President Craig Lang said. They want to look at how much money goes to student scholarships -- need-based and merit-based -- through the program and how much of that money goes to in-state students and out-of-state students, among other issues, Lang said.

Under the policy, the three regent universities must set aside at least 15 percent of student tuition revenues for use as need-based and merit-based scholarships. The policy has been in place since 1989.

Some legislators have questioned the program, saying it has happened under the radar of most students and parents and that it may not be fair for some students to help cover the costs for other students. Several other states have similar set-aside programs.

At Thursday's meeting, the board heard some basic facts about tuition set-aside in preparation for the June discussion.

The program is used to boost access and affordability, and to achieve enrollment goals in making the student body more diverse demographically, ethnically and socio-economically, Sayre said.

The program is a "valuable tool that allows the universities broad discretion" to meet the needs of students and respond to economic conditions, such as the Iowa farm crisis, she said.

Tuition rates are set using the Higher Education Price Index, which measures inflation in education, Sayre said. No additional amount of tuition increase is set to compensate for the set-aside program, she said.

Tuition proceeds do not cover the cost of running the universities, and all in-state students are subsidized by the state appropriations, she said.

At the three universities, 80 percent of resident students who receive aid demonstrate need, Sayre said. Nationally, Iowa ranks third-lowest in state-funded aid to students at public universities, she said.

Regent Bob Downer of Iowa City said there seems to be a perception that tuition revenues go into a bucket, and 15 percent to 20 percent of that bucket comes out and goes to someone else. Downer said that's not the case.

"It goes into the general fund, and the case could be made that it's coming out of the state appropriations or other general fund sources," he said of the set-aside program.