For decades now, thousands of Iowa's public university students have been paying part of the tuition for peers.
Are they paying hundreds of dollars more each year toward another student's bill because they are altruistic? No. It's because they have no choice.
"I had no idea that the Iowa Universities were diverting tuition dollars," a constituent wrote to State Rep. Jeff Kaufmann, R-Wilton, who shared the letter. "I have two kids at the (University of Iowa). It is rather upsetting that my kids as well as my wife and I are borrowing money to pay for their tuition at the UI and some of that tuition is being diverted to other students."
Call for Comment: Should students be forced to pay for other students to go to college. Weigh in in the comment section below.
The practice is referred to as a "tuition set aside." It is used in Iowa and many other states for financial aid.
Iowa's university policy requires setting aside for financial aid at minimum 15 percent of tuition paid by students at the three state universities. For the upcoming school year, University of Iowa, Iowa State University and University of Northern Iowa will set aside on average 21.5 percent of tuition to fund mainly need-based, but also merit-based, scholarships. This is then distributed to less than half the student body.
For their part, regents challenge the idea that one student is paying bills of another.
“It’s not necessarily that you’re taking it out of my pocket, although they think they are taking it out of their pocket,” Regent Craig Lang told the Ames Tribune. “I think the point is being lost...”
Universities generate $49 million for financial aid
The universities and the Iowa Board of Regents proudly tout the efforts to keep the doors open to all Iowans and maintain "access and affordability."
"The Regents increased the commitment to student financial aid to record
levels, ensuring access to the public universities for all Iowans regardless of means," the regents reported in the latest tuition plan. "In the last three fiscal years, Regent universities have continued to exceed the minimum required 15 percent set aside of gross tuition proceeds for student financial aid by nearly $130 million."
That amounts to $49 million in fiscal 2012, according to the report.
Recently, began zeroing in on this program and have been raising questions.
Why should one student be forced to pay tuition for another while Iowa has among the highest student debt in the nation? Iowa university students are walking away with nearly $28,000 in debt, according to a recent Des Moines Register report.
So where do you stand? Should universities continue to set aside tuition to help people with less means go to school?
This post is a honeypot, in the same sense that a blog post asking "SHOULD WELL-TO-DO DRIVERS BE FORCED TO PAY FOR ROADS THAT ANY POOR SLOB CAN DRIVE ON?"
I remember speaking with a finance professor some time ago about this type of tuition model where tuition is raised higher so students who can afford it pay more, and then there is more money to subsidize education for lower income students who need help. He said this is the most sustainable way to maintain access for all and quality at public universities at a time when the public no longer wants to use tax dollars to subsidize.
Say the amount withheld and redistributed is 20% (the university retains 80% of tuition collected. Maybe it'd be easier to swallow if tuition was simply not charged to 20% of students in the first place? It sounds fairer but the net financial result for the university is the same. Maybe it is not done the second way (by tuition waivers) because it takes time to do the necessary evaluating and choosing? Or maybe my logic is horribly wrong.
If we all give a little, scholarships are possible. But 24% of each in-state student's tuition to pay for someone else's tuition is too much. We give and give till it hurts, and my daughter is in debt. Not fair.