September 1, 2014

GOP lawmakers question “tuition set aside” program at Iowa, ISU, UNI

Republicans in the Iowa House are raising questions about a policy that takes a portion of the tuition students pay to attend the University of Iowa, Iowa State University and the University of Northern Iowa to provide scholarships to other students. Representative Scott Raecker, a Republican from Urbandale, has been in the legislature since 1999, but Raecker said he just learned about this long-standing policy in the past few months.

“Twenty-four percent of the tuition paid by a student at the University of Iowa goes to subsidize other students’ (scholarships); 18.6 percent at the Iowa State University and 15.3 percent at UNI,” Raecker said recently during a House Appropriations Committee meeting. “That total is just over $143 million of tuition payments by students that are being used to off-set scholarship of other students rather than to pay for their own education.”

A policy set back in 1989 by the board that governs the three public universities in Iowa requires the schools to set aside a portion of the tuition payments from in-state students to provide scholarships to other students, based on need. According to University of Iowa student body president Elliot Higgins, 20 percent of the undergrads on the Iowa City campus get scholarships from that pot of tuition money paid by other students.

“While we have a record number of students, the cost of higher education is becoming more difficult to pay for; 3,900 undergraduate students receive needs-based scholarships every year, funded through our university set aside funds,” he said late last week during a news conference in the statehouse.

This year, more than 25,o00 students at the three universities got scholarships from the money set aside from the tuition other students paid. Representative Raecker suggests the parents and students who pay that tuition should probably get a charitable deduction on their income taxes for that portion of the tuition payment.

“Ask the constituents in your district if they were aware, with the tuition they’re paying at the universities, if that money is going to more than just the cost of their education, but to off-set the cost of other education,” Raecker said last week during House debate.

Many other states have the same system. In Texas, for example, at least 20 percent of the tuition students pay to attend public universities in that state is set aside to provide scholarships.

“This is a common practice and policy,” Raecker said. “But it is a policy that we, as legislators, at the least need to make sure is disclosed to those paying the bills.”

The presidents of Iowa’s three public universities have promised to disclose on tuition bills the amount that is set aside to provide scholarships for other students.

Iowa currently ranks third lowest among the 50 states in providing scholarship support so low-income students can attend a public university. For the past three years, Iowa legislators haven’t provided any state money for work-study programs on the campuses.