The right scale for set-aside tuition

Gazette Editorial Board

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For more than two decades, Iowa's public universities have scooped money from tuition paid by some students to use for scholarships and financial aid to other students. This set-aside money goes toward need-based and non-need-based aid for eligible students from Iowa and out of state.

The intent is to help keep a college education more affordable for more students. The set-aside amount has grown from 13 percent of general tuition the first year to 22 percent in fiscal year 2011 - never decreasing in any year.

That's a cause for concern, because it also reflects trends in education costs and student debt.

The increase in set-aside money tracks closely to the rise in tuition costs (faster than the general rate of inflation much of this period), state government's declining contribution to the Regents universities and, in recent years, the nation's economic slowdown that put more families and students in financial straits.

Not surprisingly, student debt continues to rise. In the latest national Project on Student debt report, Iowa graduates averaged more than $29,000 in debt - third highest in the nation.

The set-aside policy's role in all of this is not well-known or understood by students. Some legislators want more transparency. The Board of Regents, which governs the universities, say information is readily available. Still, the board is considering a policy change requiring schools to directly provide each student with the set-aside information on their tuition bills or receipts.

OK. But there area bigger questions:

l Should there be a ceiling on how much tuition from some students - many of whom take out loans to pay their bill - is used to underwrite the education of other students (current policy sets a 15 percent minimum)?

l Why, according to Regents figures, is more than one-third of the set-aside money at the University of Iowa going to students who don't demonstrate need (and 27 percent at Iowa State, 20.5 percent at Northern Iowa)?

l And is the policy of including non-residents for assistance from the set-aside funds unfair to in-state students?

We're not sure of the “right” answers to these questions. But they deserve Regents scrutiny and a response.

The set-aside trend also is, in part, yet another result of the Legislature's declining financial support for universities during the past decade, and especially since 2009. The universities responded with major cuts in operations and programs, some necessary and some that won't be widely missed. The Regents also have continued to raise tuition.

As legislators weigh the next state appropriation, they must be keenly aware of the impact their decisions make on not only the universities, but the true costs for students.

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