An Assessment and Review of the New Tuition and Socialized Financial Assistance Program

1. An Assessment and Review of the New Tuition and Socialized Financial Assistance Program Office of the Student Regent Presented on the 28 September 2007 meeting of the Board of Regents

2. Outline of Discussion I. Introduction a. Objectives of the Policy Review b.Scope and Limitation of the Policy Review c. Significance of the Policy Review II. Impact presentation and assessment a. Low enrollment rates / High no-show rates b. Threatened closure of particular courses c. Driving away qualified students

3. d. Questioning the survival in UP e. Stretching the limits of the Filipino family’s finances f. Additional stress factors for the education system g. Depriving education to majority of the youth h. Continued opposition, unified freshmen perception i. More damage to come

4. III. Tuition and STFAP Policy Critique a. On the basic postulates on the concept of education b. On the “stagnation of state support” c. On UP’s comparison to private schools d. On the “costing” and socialization of tuition e. On the faulty legitimacy of the implemented policy IV. Recommendations

5. I. Introduction Objectives of the Policy Review • to determine the initial impacts of the tuition increase on UP freshman enrollment system-wide • to re-examine the policy bases and presumptions of the new tuition rates designed in the new Socialized Tuition Financial Assistance Program (STFAP) • to critique and disprove the bases of the new policy in increasing the tuition • to recommend policy measures to the Board of Regents and the UP administration to address the presented problems

6. Scope and Limitation This Policy Review is limited by the inadequacy and incompleteness of official enrollment and STFAP data received from UP administration offices. Much of the official system-wide data only comprised of consolidated freshman enrollment data, without a detailed breakdown based on UPCAT qualifiers, walk-ins, wait-lists, among others.

7. As such, the study had to rely much on college-level data and reports from the student councils of the Katipunan ng mga Sangguniang Mag-aaral sa UP (KASAMA sa UP), a system-wide alliance of student councils, and OSR volunteers. Nonetheless, these data would be sufficient for an assessment of the new tuition and STFAP scheme, and forward policy recommendations to the UP Administration.

8. II. Impact presentation and assessment A. Low enrollment rates / High no-show rates • If the freshman enrollment data collated by different student councils and OSR volunteers are used, low enrollment figures have been registered in certain courses of study and professions. • The 12.3% decreased enrollment figures in the entire UP system may be seen as prima facie coincidental only with the implementation of the tuition increase, especially as the tuition increase remain the only new variable introduced in this year’s enrollment • Low enrollment was registered in various UP units systemwide.

9. Appendix 2 (system-wide enrollment)

10. B. Threatened closure of particular courses Table 2. Selected UP Diliman Courses with Low Freshman Enrollment Relative to the Quota

13. The use of the course quotas compared the actual freshman enrollment in a particular course is an indicator of the prospective decreasing academic and market relevance of these courses, and the corresponding effect on the production of knowledge and graduates for the scientific and cultural development of the university and the country.

14. Arts and Humanities Courses • There are no new freshmen in UPD’s Araling Pilipino, Filipino, and Malikhaing Pagsulat sa Filipino. This is notwithstanding low freshman enrollment in Comparative Literature, Theater Arts, Speech Communications, Creative Writing, English Studies, and Art Studies, all in the College of Arts and Letters (CAL). • Low freshmen enrollment has also been registered in other culture and arts courses including Communications Research, Interior Design, and Fine Arts.

15. Engineering, Natural and Social Sciences Courses • In UPD College of Engineering, out of all 12 undergraduate engineering courses in UPD, enrollment in the BS Metallurgical Engineering, BS Geodetic Engineering and BS Mining Engineering proved to be the most disturbing, with only 25.71%, 12% and 5.71% actual enrollees relative to the course quotas, respectively. • Even other science courses have exhibited markedly low enrollment rates as compared to the course quotas. This trend is reflected in both the natural sciences (as in the case of BS Geology, Physics and Applied Physics) and the social sciences (BA History, Philosophy, Sociology, Anthropology and Geography). The same can be observed for BS Home Economics and BS Statistics.

16. Other Professions and Courses of Study • Only a little more than ten students in both courses of the College of Social Work and Community Development. • Other courses focusing on the improvement of social services delivery in the country share the same fate. Physical Education, Sports Science, Elementary Education and Library and Information Science barely filled up at least 10 slots in their programs.

17. Also disturbing is the less than twenty freshmen turn-out in BA Public Administration, considering its status as a National College within the university. • In all of these, it is clear that there has been low freshman enrollment for the Academic Year 2007-2008 in important courses of study and professions. The relevance of these courses are being endangered should the trend of low freshman enrollment continue in the coming years.

18. C.Driving away qualified students Table 3 Selected Courses with Low Freshman Enrollment Relative to the Number of Qualifiers Source: Compiled data from the UPV OUR

19. By increasing the tuition, the university has automatically lost some of its comparative advantage to other schools in terms of affordability. As the tuition gap between UP and other universities offering similar courses narrowed with the implementation of the tuition increase, UPCAT qualifiers and their families now readily look for alternative schools, compared to previous years when the default University of choice can often be UP, in terms of cost and quality.

20. Presumably, UP shall now be freely competing with the country’s top high-cost private schools insofar as higher income students are concerned, notwithstanding free competition with universities catering middle income students. • UP shall also now be competing with other SUCs, in getting the best students from lower income strata, as the tuition in UP for low-income students is substantially higher compared to schools catering to students in these income levels.

21. Richer students tend to choose courses primarily based on the course curricula of each university with tuition issues playing subsidiary considerations only. As the analysis go further down the socio-economic income levels, tuition considerations can have more weight over course curricula on the choice of courses and schools. These observations were noted through the informal consultations with freshmen’s parents during the enrollment.

22. D.Questioning the survival in UP • Originally, the UP administration proposed 3 mechanisms to serve as impact buffers: (1) early announcement of the new scheme, (2) putting in place an installment program for tuition payments and (3) financial assistance through STFAP implementation of the new tuition scheme.

23. Mechanism (1) was implemented in order to provide prospective students “with an informed choice regarding alternative education choices and their respective cost-quality trade-offs” according to the de Dios report. It is then interesting to note that in the freshmen perception survey, a significant 20.9% of the respondents became aware of the tuition increase only on the day of the enrollment itself. Also the source of information regarding the tuition increase was primarily the media, with 47.8%, and the relatives and friends, 40.3%. Only 22.8% got the information on the tuition increase from the UP administration.

24. Option (2) of an installment program, however, never materialized. Many parents have stressed that the lack of measure to spread out the burden of raising their children’s tuition has aggravated their hardships.

25. The implementation of the STFAP, on the other hand, was hardly felt to adequately address the students’ financial concerns. The freshmen survey states that among those who applied for STFAP and whose results were released, 66.1% felt the STFAP to be inadequate. • This inadequacy of the STFAP can be reflected in the numerous cases of students being assigned to higher income brackets which are not reflective of their economic status. Inherent flaws in the STFAP leads to a concentration of the population under the higher bracket groups.

26. The current STFAP placed more students under the policy of the tuition increase when compared to the old STFAP bracketing. Take the case of UPLB as an example. In the old STFAP, those under Brackets 1-5 qualified for non-payment of tuition. This amounts to around 5% of the population. In the new STFAP, however, only 2.4% of the freshmen will not pay tuition. • Furthermore, students who should have been granted tuition discounts, those in Bracket 6-8 under the old scheme for example, were faced with a more than 100% increase this year as their tuition effectively became P600/unit (under Bracket C).

27. Table 4. Comparison of STFAP Recipients in UP Los Baños Source: data compiled by the UPLB USC

28. The tendency to lean more towards the higher incomes is reflected by the very nature of the STFAP. It discourages the ordinary family to enter their child in UP for the great financial risk it poses. Meeting the current daily cost of living entails a family of six to have an annual income of anywhere between Php254-286,000. In this set-up, they can allocate only a miniscule, or realistically close to nothing of their finances for their children’s education. This is further aggravated by the STFAP as the mentioned annual income merits a P300 per unit payment.

29. E.Stretching the limits of the Filipino family’s finances As per the UP Diliman freshman perception survey and the informal consultations with parents during the freshman enrollment last May 2007, the following are the most common outside sources of finances for their children’s UP education: • GSIS and SSS salary loans • UP Student Loans • Private scholarships • Government /LGU Scholarships • DOST Scholarships • UP Scholarships • OFW remittances from relatives • Looking for benefactors, either from relatives or family friends • Taking out savings originally intended for other purposes • Usurious loans from 5-6 operators

30. Loans can only do so much in financing the entire education of a UP student in the family, as salary loans unnecessarily narrow the disposable income of families for other essentials in the long-term, despite the short-term benefit of facilitating actual enrollment in the University.

31. On the other hand, the number of scholarships which may be availed by UP students, particularly Department of Science and Technology (DOST)and private scholarships, are now expected to become less. The scholarship resources of these institutions shall readily be drained with the increase in tuition and fees. Unless scholarship resources increase considerably, students and scholarship institutions may face either fewer students with full scholarships, or more partial scholarships to accommodate more students.

32. For example, assume that the DOST scholarship budget is pegged at PhP1M. Instead of accommodating around 166 UP students for DOST scholarships under the old tuition structure (300/unit, assumed simplified total tuition/fee at PhP 6000), it can now only accommodate around 71 students under the new tuition structure (Bracket C, 600/unit, simplified total tuition/fee at PhP14000.

33. The hardships underwent by the iskolars ng bayan and their families have led them to question the feasibility of continuing their enrollment in UP.

34. F.Additional stress factors for the education system • Given the university’s position as the country’s premier state university, it serves as a model of excellence to other educational institutions. With the UP administrations implementation of the new tuition policy, it has laid basic premises for other universities to follow suit.

35. In a span of six months after UP has approved its tuition increase, other major universities have declared intentions to increase their tuition using the same bases as that of UP’s tuition and STFAP policy presumptions. An example is the scrapped 500 percent proposed tuition hike in The Polytechnic University of the Philippines’ (PUP). • Other universities: Eulogio Amang Rodriguez Institute for Science and Technology (EARIST), the Philippine Normal University (PNU) the Mindanao State University [MSU] and University of Northern Philippines (UNP).

36. UP’s tuition hike has also been cited, although in not in black-and-white, by other private universities as justification for their own increases. The universities point out that their tuition cannot be lower than that of a State University like UP, such include the Philippine School for Business Administration (PSBA) administration. • Furthermore, the cost of tuition in UP is now nearly double the national average tuition set in private institutions. The new P1000/unit base tuition in UP even surpasses the average tuition in the National Capital Region.

37. Table 5. Tuition throughout the years (2003-2007) Source: CHED partial report on tuition increases 2005 as reported in http://www.mb.com.ph/issues/2005/06/19/MTNN2005061937328.html And http://archive.inquirer.net/view.php?db=1&story_id=36247

38. Considering that there is an underlying notion that spending more leads to higher quality of education, who should then bear the burden of the expenditures? Should UP follow the characteristic of private schools which pass this spending to the students and their families? Also, assuming the premise that the cost of UP education is higher than that set by private schools, should this level then be a standard expenditure level for other schools to come close to the same quality and level of UP education?

39. G.Depriving education to majority of the youth • As the UP tuition scheme become level with the rates in private universities, many freshmen might soon find themselves dropping out of the university due to financial constraints. This has been the experience in many private higher educational institutions, especially those that cater to the lower and middle income classes

40. Table 6. Enrollment figures throughout the years (2000-2004) Source: Higher Education Statistical Bulletin AY 2003-2004, CHED

41. Despite increased enrollment in public tertiary institutions, these cannot be able to absorb all of those who have dropped out from private schools. • With an increase in tuition in the premier state university, and a widespread tuition hike in the public sector, it is prospective that enrollment rates may drop for both public and private educational institutions.

42. A clearer context of the UP new tuition scheme impact can be made with the consideration of the macro-economic conditions of the Filipino people in general. By taking into account the daily cost of living among various regions in the country, it is possible to come up with a national view of the annual cost of living. Comparing national indicators such as the cost of living estimates and the nominal wages, then superimposing it unto the STFAP mechanism, the interplay between these factors can root out the inadequacy of the STFAP to provide democratic access to majority of the population.

43. Table 7. Comparison of Cost of Living Estimates and Nominal Wages

44. Under this set-up, even minimum wage earners will have to pay the old level of maximum tuition at P300 per unit, despite being unable to meet the needed cost of living. • The current set-up of the STFAP makes it extremely difficult for the lower income brackets to enter and stay in the university.

45. Minimum wage earner (national average) = P85,957.50 Annual Cost of Living (national average) = P254,427.81 Figure 1. The STFAP Bracketing System in light of the National Cost of Living and Minimum Wage

46. H.Continued opposition, unified freshmen perception • A stratified random-sampling survey was conducted by the OSR with UPD School of Statistics student volunteers among UPD freshmen to present a scientific reading on the perception and opinions of the current freshmen. (See separate powerpoint on the freshmen perception survey). • A nation-wide formation opposing the tuition hike also now exists uniting the ranks of freshmen, upperclassmen, parents and other sectors: the Students and Parents Against the Rising Cost of UP education (SPARE).

47. III. Tuition and STFAP Policy Critique • The gravity of the impact of the tuition hike was already foreseen by the wide opposition of the UP community before it was approved by some members of the BOR last year. The new tuition and STFAP policy was bound to have its ill effects, because from its basic framework to its proposed methods, various points of contention have been laid to spell out its ultimate defects. • This part of the study scrutinizes the reports of the two ad hoc committees commissioned by the UP President. One is the de Dios report which aimed “To Review tuition and other fees,” the other is its complimentary Atanacio report which aimed “To review the socialized tuition and financial assistance program”[1]. [1] The de Dios committee consists of professors Emmanuel de Dios, Helen Valderrama, and Rene Felix. The Atanacio committee consists of professors Edgardo Atanacio, Emmanuel Esguerra, and Rene Felix

48. A.On the basic postulates on the concept of education The first section of the de Dios Report contains its basic premise on education: The hitherto prevalent notion that state-owned institutions are obliged to set uniformly low (even zero) tuition fees has gradually given way to acceptance of the principle that students themselves – rather than the general taxpayer – should pay for the cost of higher education, subject only to the equity-proviso that poor students who qualify should receive financial relief and assistance. This growing realisation has been prodded on by the stagnation of state-support given the government’s chronic budgetary difficulties; the spread notwithstanding of privately provided undergraduate education (though at times of uneven quality), thus reducing the social case for a public subsidy; and finally the University’s desire to reinforce its intellectual freedom through financial self-reliance.[emphasis mine]

49. This paragraph is further elaborated by a footnote particularly on the policy’s premise on tertiary education. The footnote elaborates a deeper basis for disregarding guarantee of access to education by considering it as self-serving only.

50. A public subsidy to an activity is justified based on likely positive externalities arising from it, i.e., social benefits not apparent to the individual himself. It can be argued that virtually all the benefits of an undergraduate education are in fact appropriable by the private individual himself, who should be therefore be willing to pay for its cost. Proof of this is people’s demonstrated willingness to pay for private college education (and indeed the Philippines already has an unusually high ratio of college-finishers to total its labour-force). [emphasis mine]