Regents Approve Tuition Set-Aside Replacement Plan
By Diane Heldt, Reporter
IOWA CITY, Iowa - The fundraising arms at Iowa's three public universities are being encouraged to raise $200 million to replace some of the student financial aid money for in-state students now provided at the schools through the tuition set-aside program.
The state Board of Regents, during a meeting Thursday in Iowa City, approved a plan to phase-out the tuition set-aside program and replace those scholarship dollars for resident undergraduate students with state funding and increased private fundraising by the university foundations. The board unanimously approved the plan, with Regent David Miles absent.
It's important the fundraising goals for each university be realistic targets, Regent Bob Downer of Iowa City said. He said he has "serious concern" about a $58 million suggested target for the University of Northern Iowa, given that much of its alumni base has historically been school teachers, who tend not to have high incomes.
"I think it's important that we not set targets that are unrealistic, particularly in their case," Downer said.
Regents leaders said the $200 million total is a suggestion they hope the foundations adopt as a goal in helping to replace tuition set-aside, a program that drew fire last spring from some legislators and parents who didn't like the practice of using tuition revenues as a source for student aid.
"We really want the foundations to focus on that target," Regents President Craig Lang of Brooklyn said.
The University of Iowa, Iowa State University and UNI provided$38 million need-based financial aid to 14,083 resident undergraduates in 2011-12 through tuition set-aside. The regents want to replace that money by asking the 2013 Legislature for $39.5 million to launch a state-funded aid program for needy Iowa undergraduates.
To replace the merit-based scholarships the three universities give to resident undergraduates, which totaled about $8.5 million last year, the regents plan calls for increased fundraising by the university foundations. The level of university endowments needed to generate that same amount of support for merit aid is $200 million at the three universities, officials said. Obviously, regent leaders said, it will take time to build endowments up to that amount.
In return for the state funding of $39.5 million to establish that aid program for needy undergraduates, the regents would reduce resident undergraduate tuition at the universities by that amount in the following year. That would result in a one-time tuition reduction of about $1,000 per resident student in fall 2014, if the regents get the state funding this session, officials said.
The regents also hope to reduce tuition commensurate with the amounts raised by the university foundations, Lang and board President Pro Tem Bruce Rastetter said, though that exact amount is unknown at this time.
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