Did You Know Your Student Is Paying Someone Else's Tuition?

Starting in the late 1980s the University of Iowa (Iowa), Iowa State University (ISU), and the University of Northern Iowa (UNI) implemented a practice of setting aside a portion of tuition payments to offer as scholarships to other students. 

In September 2004, the Board of Regents (BOR) approved a formal policy that requires the public universities to set-aside a minimum of 15 percent of gross tuition proceeds for student financial aid. Many universities in other states have similar policies.   

In FY 2011, over $144 million (21.3%) of tuition proceeds was set-aside and awarded to undergraduates and graduate/professional students as need-based and merit-based aid at all three institutions. A total of 25,583 undergraduate students received student financial aid through the tuition set-aside funds. 

Each university sets the amount of tuition set aside for scholarship of other students. The percentage and amounts vary between each school, undergraduate and graduate, and resident and non-resident tuition.  The following percentages of resident tuition are set aside for each institution: Iowa - 24%, ISU - 18.6%, UNI – 15.3%. 

For undergraduate students the current effect of the policy is that $1,864 of the $7,765 tuition bill at the University of Iowa is used to offset scholarships of other students.  At ISU - $1,392 of the $7,486 tuition bill goes to other students, and at UNI - $980 of the $6,408 tuition bill is applied to other students’ scholarships rather than direct costs of the paying student.

I have asked numerous constituents who have attended, or have students attending, Iowa, ISU and UNI if they are aware of the set aside.

Not a single person was aware of the policy – and every person felt strongly that the policy should be disclosed to those paying tuition.

The current policy is disclosed in the financial statements of each institution and is discussed annually at a BOR meeting and with each respective Student Senate.

I commend members of the regents' leadership, and our university presidents, for working to enhance disclosure by drafting a policy proposal that would “provide each student a notice of the specific amount of tuition set aside that is required” by each institution.

This notice would be prominently printed in student tuition statements, receipts, and e-mails sent to students regarding tuition.

At a recent meeting of the regents there was a presentation and discussion on the tuition set aside policy.  The regents tabled the draft disclosure policy until a later date.

The board of regents is committed to the integrity of the institutions, and to openness and transparency of policies impacting students. It is critical that the BOR act swiftly to implement the proposed disclosure policy to inform students of the practice to use a portion of their tuition payments to subsidize other students’ education costs.

 Two Last Meetings with Legislators

The Urbandale Chamber of Commerce partners with Senator Brad Zaun and me, along with officials representing the city, county and Urbandale schools, to offer several opportunities for public input. The final two public forums will take place at the Chamber Office at 2900 Justin Drive, Suite L. Please join us on:

Saturday, March 31: 10:30 am to noon
Saturday, April 28: 10:30 am to noon.