More scholarships for poor better than free tuition–PIDS

/ 12:01 AM February 14, 2017

Funding more scholarships, grants and student loan programs to benefit poor but deserving college students is a better way for the government to catalyze tertiary education in the Philippines than mandating tuition-free education in all state universities and colleges (SUCs).

According to a policy note written by Aniceto Orbeta Jr. and Vicente Paqueo of the state-owned think-tank Philippine Institute for Development Studies (PIDS), the proposal to grant free college education would have little impact on the poor and create bigger distortions in other facets of higher education.


The detailed content of this paper was released by the free-market advocacy group Foundation for Economic Freedom, of which both Orbeta and Paqueo are members.

The PIDS paper proposed instead that the government fully fund the Unified Student Financial Assistance System for Tertiary Education (UniFAST), which was enacted in October 2015.


UniFAST was designed to unify all modalities of publicly-funded Student Financial Assistance Programs (StuFAPs)—scholarships, grants-in-aid and student loans—for tertiary education.

It rationalizes the allocation, utilization and client-targeting of government resources and improves access to quality higher and technical education for those who need it.

The current StuFAPs funding of P5.75 billion is seen as insufficient as this accounts for only 29 percent of the required P19.8 billion needed to raise the enrollment rate of the people from the bottom 20 percent of the population.

“If the government wants to expand access of the poor but capable students, it only needs to put more funds to the grants-in-aid component. If it wants to finance more bright students, it needs to put more resources into scholarships. If it wants to expand access for those who are neither poor nor bright but are college ready, it only needs to expand the allocation for student loans. Moreover, it does not favor one sector—financing follows the student, to public or private HEIs (higher education institutions),” the paper said.

The paper also pointed out that “targeting the poor with full financing using grants-in-aid under the UniFAST law will benefit more poor students than an ‘untargeted’ general tuition subsidy for students of SUCs.”

There are several bills pending in the legislature calling for free tuition for all students enrolled in SUCs, with proponents invoking the constitutional provision mandating the state to “protect and promote the right of all citizens to quality education at all levels” and “take appropriate steps to make such education accessible to all.”

While the free tuition policy for all students in SUCs is popular and appears propoor, the policy note said that since tuition accounted for only one-third of the college costs, only those who have resources to pay for the rest of the costs would effectively avail of the subsidy. “Any partial financing is antipoor,” the paper said.


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