Points of (dis)order
Steering through the STFAP mess
The following section attempts to shed light on the confusion that has become of the new Socialized Tuition and Financial Assistance Program (STFAP), with emphasis on the exchange between UP President Emerlinda Roman and STFAP critic Faculty Regent Roland Simbulan. This section also includes the proposed STFAP structure by former UP administrators and college deans led by former Vice President for Academic Affairs Maria Serena Diokno. Into the fray, therefore.
In December 2006, the Board of Regents approved, along with the tuition increase, the STFAP, which determines the tuition rate a student pays as well as the assignment of brackets corresponding to discounts and stipends the student will receive.
In the new STFAP, the number of income brackets is reduced from nine to five. The Atanacio committee, which drafted the new STFAP, also introduced an additional measure to predict family incomes.
With the tuition increase, the base tuition or the tuition rate one pays if s/he does not apply for subsidy will be P1,000 per unit from the current base tuition of P300 per unit.
Unlike in the old STFAP where the base tuition is also the highest rate, a student whose self-declared income is more than P1 million will pay P1,500 per unit. According to the Atanacio report, making P1,500 the default per-unit rate would invite too many applications for tuition subsidy.
Predicting family income: the income function
The assignment of brackets to students applying for tuition subsidy would now be based on an income function formulated to predict the student’s family income, aside from the other measures used in the old STFAP.
Claiming that the current process of assigning students into brackets is not based on an “empirically verifiable procedure,” the Atanacio committee provided an income function, whose factors attempt to link different socio-economic variables in the family level with annual family income.
Using data from 2004 STFAP applicants and the 2003 Labor Force Survey and Family Income and Expenditure Survey (FIES), among the indicators of income determined as inputs into the income function are ownership of assets such as air conditioners, phones (landline and mobile), cars, refrigerators, and television sets, and family attributes such as the number of household help and family members working overseas, studying, or engaged in different occupations.
According to Simbulan, this is not an acceptable prediction of a student’s family income, as it considers the quantity rather than the value of the assets owned. He said that the depreciation in the value of the assets is not accounted for, so that having a greater number of assets, regardless of the real value of the assets owned, would automatically mean a higher family income.
Simbulan also said that assigning relative weights to each asset and family attribute by matching data from nationwide surveys with those from incoming UP students in the past is “statistically flawed.” He explained that the families of UP students in the past or in the future cannot be assumed to be representative of the national population.
Roman, however, countered that UP students are a subset of the national population, and that “relationships between family income and specific variables of interest that hold in the national also hold for any subset of it.”
Roman added that a student’s family income is not determined solely on the basis of ownership of assets, but by considering all other variables associated with family income as shown in the measures used in assigning STFAP brackets to students.
Measures for bracket assignment
The highest bracket assignment a student applicant gets from the following measures will determine the tuition rate s/he has to pay:
1. bracket the applicant requests;
2. bracket based on reported income (see table 2), which is the sum of the incomes of family members, other contributions received, and other income sources;
3. bracket based on specific indicators, such as previous school fees paid if the applicant did not enjoy a scholarship (see table 3), and having security guards, swimming pools, international credit cards and family-financed foreign travel, all of which automatically assigns an applicant to Bracket A; and
4. bracket as determined by the income function.
To illustrate, a student who (1) requests to be assigned to Bracket D; (2) reports an annual family income of P130,000 (Bracket D); (3) paid tuition amounting to P20,000 in his/her previous school (Bracket D); and (4) has a predicted income under Bracket C, will be assigned to Bracket C, the highest among the four brackets determined using the four basic measures.
Bone of contention: from free tuition to P300/unit
Simbulan pointed out that Bracket D in the new STFAP scheme corresponds to Bracket 5 in the old one, which prescribes free tuition and a semestral allowance of P6,000 for students with an annual family income of P80,001 to P130,000 (see table 1). Under the new scheme, however, such students will now be made to pay P300 per unit.
Simbulan maintained that latest data from the National Statistics Office show that an annual income of P80,001 to P130,000 is still not enough to cover the daily cost of living for a family of six, which amounts to P201,626 per year as of June 2006. As such, students under this family income should still be exempt from paying tuition, he said.
In her reply, Roman stated that in the current setup, students under Bracket 5 are paying the base tuition of P300 per unit as shown by the proportion of STFAP applicants to the total enrolment. She added that families with P80,001 to P135,000 annual income belong to the upper 50 to 70 percent of the national income distribution, which puts them above the poorest 30 to 40 percent and above the poverty threshold.
Roman, however, diverted in the same letter to saying that chancellors have already been asked to strengthen the student loan program, increase the number of student assistantships, and solicit more scholarship grants to help “affected” students.
The new STFAP did not address the compensation for student assistantships. Part of the 1989 STFAP, student assistantships give students opportunity to work for the university for P25 per hour.
Alternative STFAP: the Diokno proposal
Aiming to extend greater financial assistance to needy incoming students, a group of former UP administrators and college deans proposed an alternative to the BOR-approved tuition payment structure. Led by Diokno, the group recommended to the UP administration that the income ranges for some brackets in the new STFAP be adjusted to account for the actual amount that families annually spend on food and education, as shown in the 2003 FIES. (see table 4)
Diokno’s group suggested that incoming students whose family income fall under Bracket D be entitled to free tuition, as they were in the old STFAP, while still requiring them to pay miscellaneous fees in full. They said that based on the 2003 FIES, this bracket covers minimum wage earners, who are tax-exempt, and a number of families spending no more than P800 on education annually.
The income range for Bracket C, on the other hand, should be split into two, according to the group. They explained that students whose family incomes are from P135,001 to P250,000 and who used to pay P75 to P225 per unit under the old STFAP would now pay P600 per unit, while nationwide data shows that families under this income range may be spending at most P2,200 on education annually.
According to Student Regent Raffy Sanchez, UP President Emerlinda Roman said during the BOR meeting in February that following such proposal would translate into a profit of only P5 million instead of P16 million for the university.
Sanchez noted that the difference of P11 million in profits for UP between the new STFAP and Diokno’s alternative would come from the poorer students under Brackets C and D, as only these brackets are adjusted in Diokno’s proposal. This is counter to the administration’s claim that the tuition increase would affect the richer students, Sanchez said.
“We did not increase tuition just to reach a breakeven,” Sanchez quoted Roman as saying. Sanchez added that this reveals that the objective of the tuition increase is to generate income rather than to make UP education more accessible by providing incentives to poorer students.
STFAP and income generation
With the P300% tuition increase to be implemented through STFAP, UP is expected to earn P103 to P154 million pesos annually, depending on the number of incoming students who apply for tuition subsidy.
Thus, an increase in the number of students who would apply for lower STFAP brackets would decrease the net income for the university due to tuition discounts and stipends. (see table 5)
According to the Atanacio report, a P1,000 base tuition would be a much stronger incentive for students to apply for scholarship than the existing P300. Thus, the application rate among students entitled to subsidies may be greater than the 39 percent recorded in 2004. # With reports from Toni Tiemsin
SOURCES: Diokno et. al, “The New Tuition Structure (The Devil is in the Details).” Atanacio et. al, “Report of the Committee to Review the Socialized Tuition and Financial Assistance Program.” Simbulan, “Issues Pertaining to the STFAP Re-bracketing and Tuition Fees.” Roman, “A Reply to Faculty Regent Simbulan” and “Comments on the Faculty Regent” (21 February 2007). STFAP Bulletin, March 2003.
