The need for an In-depth study and further review of the Tuition and other fees increase (TOFI) at UP by Roland G. Simbulan

The need for an In-depth study and further review of the Tuition and other fees increase (TOFI) at UP

The Board of Regents, on its 1,216th meeting(15th December 2006 ), unanimously approved to adjust and implement a revised Socialized Tuition and Financial Assistance Program (STFAP) . As a result of this decision of the BOR, Tuition and other fees (TOFI for incoming freshmen and transferees of school year 2007 will increase from P 300 to P 1,500 per unit.

Unknown to many and possibly even by many of the BOR , implementing the said TOFI through the Revised STFAP mechanism as recommended by Atanacio et al committee, presents many highly questionable features which must be addressed. This is the reason why it could be claimed that the BOR may not have known what they have approved all along as they were not properly informed and the BOR simply believed Pres. Roman and her officials that the New TOFI under her Administration is good for the students, UP, and the nation in general.

The following major points provide highlights to the many inconsistencies of the new STFAP:

In determining who are eligible under STFAP, the University starts with the premise that the students and parents of STFAP applicants conceal or under-report their income or assets. (Written in the Atanacio et al report ,this statement convicts all applicants as sinners or liars without due process). This pre-judgment or conviction is supported by a method devised to estimate the income of the applicant's family. To do this, an income function was derived as shown below…..

where for the jth family, Y is current income, X is a vector of family characteristics, A is a

vector of assets owned, βi and γi are parameters to be estimated, and ε is an error term.

(For details, please read Appendix A : Estimating the income function . A-1. Atanacio et al . Committee to Review the Socialized Tuition and Financial Assistance Program (STFAP)

What are the questionable features of the components of the income function that must be studied further? Table 8.2 of the Atanacio et al report estimation results for the income function showed that several assets were given multiflier coefficients to be able to put monetary values. For example, television sets had 0.1552188, washing machine 0.1302926, motor 0.1206098, and car 0.1058442, aircon 0.0752214 coefficients.

First, if these estimated coefficients will be used as multiplier to the value of the assets listed above, what monetary value will they use? Washing machine, tv sets are fully depreciated after five years.

Second, How did they arrive at the values of the coefficients and test their applicability in real life? Relevant to the STFAP, car has a lower multiplier coeeficient than a motor bike which is the popular vehicle of the poorer people because it gives them mobility at cheaper price although using motor bike is riskier than using 4 wheeled car. More so, an aircon has only 0.0752214 and television sets has 0.1552188. It is obvious that mostly or only richer families are using aircon in their respective houses. What is being pointed out is that assets which more or less could be classified as "luxuries" had lower multiplier coefficients leading to lower values that will be contributed for the predicted income.

Third, among occupational groups, a clerk has a higher multiplier coefficient (0.1340631) than a manager ( 0.117789). This means that the higher paying occupations will have lower contributions to the predicted income due to lower multiplier coefficients. Poorer families will be having a higher increase in predicted income due to the higher multiplier coefficient.

Based on the STFAP data from 2003 to 2006, application of the income function stated above consistently reduced the percentage of Bracket E awardees from 61-63% to 15-18% only based on predicted income. Using the reported income as basis for classification, the percentage of Bracket C recipients was 20-21% but applying the income function made Bracket C as the dominant group of STFAP awardees as they comprised now 52-57%.There were more Bracket D awardees ( 27-30% ) than the Bracket E STFAP awardees (16 %).

The contention that using an income function eliminated the biases or subjectivity of human judgment in assessing the assets values and the errors attributed to lower or misdeclaration of income is mathematically correct . But sheer mathematics made many STFAP applicant families "richer" after mere fraction of a minute in a computer aided calculations. The result : they now have to pay P300 to P600 per unit plus full matriculation fees. Even the poorest groups (Bracket E), some of them became suddenly richer due to the income function as their bracket had moved from Bracket E to Bracket C or from non-paying to paying P 600 / unit plus miscellaneous fees.

Adopting the income function for estimating the income of STFAP applicants for the purpose of determining their bracket had succeeded in increasing the collectible tuition fees for UP. But is UP really doing justice among the students and not simply playing mathematics in the guise of unearthing the concealed or under-reported income and assets of the parents of students to collect more money in the form of tuition and other fees ?

The mathematical estimates of income as estimated from the income function do not end there. Some socio-economic variables are also given nominal values and these nominal values are to be added to the predicted income estimated through the income function. The increase, though small, but it also increased upward the bracketing of some STFAP awardees as shown in the simulated STFAP data from 2003 to 2006. This is important to point out because the final bracket of STFAP awardees will be determined based from the outcome of the three income classes – reported, predicted and maximum. The highest will be the basis for the final STFAP bracket.

Thus, the STFAP bracket B, C, D, E means so much complications .But adopting the procedures have succeeded in decreasing STFAP non-paying grantees from 62% if the reported income will be the sole basis to 14-15% using the predicted plus maximum income estimates.

How correct are the multiplier coefficients that will declare later on that an applicant is rich , thus he/she does not deserve to be under Bracket E of the STFAP? We are human beings and so we are imperfect as we claim! Should this be the way to commit errors!

3) Shared responsibility between the student and the applicant's parents / legal guardian / spouse

The intention of having the applicants' parents / legal guardian / spouse to certify the truthfulness and completeness of the information that their son / daughter / dependent / spouse had furnished in the application together with all the attached documents is valid. But the statement …..

"I authorize the University to conduct a bank credit investigation and send a factfinding team to visit my home/residence to verify the veracity and accuracy of theinformation provided in this application and I will give my utmost cooperation in this regard.I understand that my refusal to comply with any of the above-mentioned conditions maymean suspension or withdrawal of STFAP benefits and privileges of myson/daughter/dependent/spouse.

For those who have nothing to hide, as the proponents of TOFI may argue, have nothing to be afraid of. But the statement is also tantamount to surrendering one's individual privacy to UP. To some, this could be acceptable. How about the rest who are aware of their rights to privacy as one of the Bill of Rights enshrined in our Constitution? They may simply be scared in allowing UP to conduct bank credit investigation. It will mean, for those who are scared, will just simply forget applying for STFAP. Then, automatically, they will pay P 1,000 / unit. Then , the objective of TOFI of increasing UP income from students is attained.

Is this the proper way of raising funds especially for UP who is championing human rights and individual privacy?

4) "Those who can afford should pay more." This is the basic principle from where the UP TOFI is based. This is difficult to argue. But what is the family income referred to in such a claim?

· Are the families having income of P 80,001 up to P 135,000 rich enough so that from no tuition fee in the previous STFAP , they shall now pay P 300 / unit + full miscellaneous fees?

Based from the current STFAP (1989), students paying tuition fees start in bracket 6 (families having an income of P130,000 and above). In the Appoved STFAP, families having an income of P80,001 TO 135,000 will now pay P300/unit. Full tuition fee payment under STFAP (1989) starts in bracket 9 (Family income P250,000 and above). Under STFAP (1989), families having an income of P130,001 – P170,000 have a corresponding TFD of 25% or P225/unit. Under the BOR Approved STFAP, families having income of P135,001 will now pay P600 per unit if they are students in Group 1 (Diliman, Los Baños, Manila) or P400/unit if the students in Group II (Baguio, Visayas, Mindanao).

· Are the families earning P135,001 per year or P11,250 per month rich enough to pay P 600 / unit plus miscellaneous fees? Are their income comparable to those families who have P300,000 to P500,000 ? P500,000 income per year means an average of P41,670 per month. There is a difference of P30,420 per month. Deflated to 1989 , the income of P135,001 is only P19,259 per year.

Again , it should be remembered that that the reported income of P80,000 0r P130,000 per annum may increase 2 to 3 times when the assets are monetized after subjecting them to the income function as stated earlier.

>The reliability of the estimates should be further validated and the income function formulated in computing the predicted income must be further refined or altogether eliminated . It is difficult if not impossible to device an income function free of mathematical artifacts .Since in real life situations , truth can not just simply be canned into mathematical equation . It s GIGO! ( Garbage in , garbage out )

> The BOR approved STFAP 5 BRACKETS . It should be returned to 9 brackets or more. The reason is simple . The gap between P135,001 to P500, 000 is to big. There should be narrower gaps ie. P70,000 to P80,000 only.

> It is obvious that there is a need for an In-depth study and further review of the Tuition and other fees increase (TOFI) at UP if only…

1) To correct the mistakes and bad effects to the incoming students and the nation in the future.

3) To make sure that the parents will not be scared in applying to STFAP since they need to surrender to UP their Right to privacy.

In terms of national income percentiles, these brackets correspond approximately

The tuition fee per unit for Group II will be ⅔ of the tuition fee for Group I:

Because income is only one indicator of socio-economic status, or wealth, it is often

used together with other indicators in financial means-testing to signal a family's (or

individual's) capacity to pay, or eligibility to receive a subsidy. These indicators often include

individual or family characteristics closely related to current income, (such as educational

attainment, employment status, occupation) and various assets owned (real estate, private

vehicles, household appliances) that may serve to substantiate information given about

For the purpose of determining the appropriate bracket of STFAP applicants, an

income function is estimated from nationally representative data, NSO's Family Income and

Expenditure Survey (FIES) and Labor Force Survey (LFS). Conducted every three years, the

FIES collects detailed information on the income and expenditure patterns of households.

The most recent data available is as of 2003. The LFS is a quarterly survey that collects

information on the characteristics, and most particularly, the labor market status, of each

household member included in the national sample. Since there is a good degree of overlap

in the households covered by both surveys, it is possible to match the households in both

where for the jth family, Y is current income, X is a vector of family characteristics, A is a

vector of assets owned, βi and γi are parameters to be estimated, and ε is an error term.

Table A1 lists the variables to be included in the model estimation and their source.

They include both numeric and categorical variables. Expenditure on electricity, floor area of

house, the quantity of household appliances and motor vehicles owned and region of

residence are from the FIES. Household characteristic variables are obtained mainly from

the LFS and include number of household members in specific occupational categories,

number of household members by educational level completed, number of household

helpers employed, and number of OFWs in the household. The model is estimated by

The results of the estimation shown in Table A2 can then be used to predict the

incomes of families of STFAP applicants. To be able to do this, however, it is necessary that

the variables from the applicants' sample be constructed in the same way as those from the

Unfortunately, while the STFAP application form asks questions about the occupation

of parents and/or spouse, or guardian, siblings, and other household members, these are

not currently inputted as part of the database. Instead, only an indicator of whether the

parents are employed and the number of siblings that are employed are inputted. Another

observation is that the education variable – which has been shown in various studies to have

a strong effect on earnings – also lacks the richness it could otherwise have. The current

STFAP questionnaire asks questions about the specific level of education and even the

degree completed by every household member, but the database has information only on

whether the parents, spouse, guardian, non-working siblings finished elementary, high

school, or college, but not the actual level completed. The information on educational

attainment is not even available for employed siblings. This prevented the better utilization of

I hereby certify that I have read the entire application form and that I certify to the

truthfulness and completeness of the information that my son/daughter/dependent/ spouse

has furnished in this application together with all the documents attached. I understand that

any misinformation and/or withholding of information will automatically disqualify him/her

from receiving any financial assistance or subsidy and may serve as grounds for his/her

expulsion or disciplinary action from the University. I further recognize that in signing this

application form, I share with my son/daughter/dependent/ spouse the responsibility for the

truthfulness, accuracy, and completeness of the information supplied herein.

Moreover, I authorize the University to conduct a bank credit investigation and send a factfinding

information provided in this application and I will give my utmost cooperation in this regard.

I understand that my refusal to comply with any of the above-mentioned conditions may

1. De Dios Committee Proposed Tuition Fee Structure widens the coverage of students paying tuition fees. Based from the current STFAP (1989), students paying tuition fees start in bracket 6 (families having an income of P130,000 and above). In the De Dios proposal, families having an income of P36,000 will now pay P300/unit. Full tuition fee payment under STFAP (1989) starts in bracket 9 (Family income P250,000 and above). Under STFAP (1989), families having an income of P130,001 – P170,000 have a corresponding TFD of 25% or P225/unit. Under the De Dios committee proposal, they will now pay P600 per unit if they are students in Group 1 (Diliman, Los Baños, Manila) or P400/unit if the students in Group II (Baguio, Visayas, Mindanao).

2. To justify the nominal tuition fee increase, the De Dios Committee deflated the tuition fees (2004) to year 1989 using 2 indices, the educational services index (ESI) and the consumer price index (CPI). They computed that the real value of P300 in 1989 is only P98.4 using ESI and only P42.1 for CPI. Thus, tuition fee now (2004) should increase by 3.048 times or P914.634 to approximate the peso real value in 1989 (P300 x 3.048 = P914.634) using ESI or by 7.125 times (P2,137.76) using CPI.

3. The De Dios Committee in their strong desire to justify the tuition fees, failed to deflate the annual income of the families. The deflated (real value) of annual family income under the De Dios Committee proposed bracket are shown below:

Proposed Bracket	Annual Family Income(PhP)	Education Service Index (ESI)(PhP)	Consumer Price Index (CPI)(PhP)
A	< 36,000	11,822	5,052.63
B	36,000-136,000	11,822-44,736	5,053- 19,087
C	136,0001- 420,000	44,737- 138,158	19,088- 58,947
D	420, 001- 1,000,000	138,159-328,947	58,948-140,0350
E	1,000,000 and above	328, 948 and above	140, 351 and above
Deflator coefficient for ESI = 3.04, CPI = 7.125

Following the De Dios proposal, families having an income of P395,200 (2004) will have to pay 40% discount on tuition fee which is P600/unit for Group I or P360/unit for Group 2 UP chapters. This means a 300-600 x increase in tuition fee for the above family income bracket.

The De Dios Committee proposed that students coming from P420,001 annual family income should pay the full tuition. Deflated to 1989, this income is only P138,158 using ESI but only P58,947 using CPI. Using the STFAP (1989) these families belong to bracket 6, hence, they are entitled to 75% TFD. The TF for bracket 6 families shall increase from P75/unit to P1000 and P600, for Group 1 and Group 2 UP chapters, respectively.

4) The De Dios Committee Final Report not only propose TF increases but they also included phenomenal increases in the payment of miscellaneous fees. The proposed increase ranges from P810 to P1,405 – P2,000 per student. This will be charged regardless of income bracket. The biggest increase comes from internet (P260) and energy bill (P425) at P685/student.Why should student pay for the energy bill of the selected faculty aircon room? At UPLB, only selected faculty rooms enjoy aircon . It means students shall be made to pay for the energy bill of these selected faculty rooms. Likewise, students shall be made to pay for internet. But are there enough Computer terminals where students can access internet. Will there be 1 PC per student? Will the student pay for the computers to be installed in their classroom or dormitories.

4. The expression cited "Pay or Decay" by the De Dios Committee is too petty to argue. Decay is a natural cycling phenomenon. How much should we really pay to avoid decay? But the De Dios proposal opens up a debate about the Philosophy of UP education. As UP approaches its Centennial Year celebration (1908), is it changing already its philosophy "UP para sa masang Pilipino.

It is difficult to argue against the financial statement that those who can afford should pay more. But the De Dios Committee failed to conclusively show who are those families? It deflated the nominal value of tuition fees (using educational service indexing method) but it left untouched (non-deflated) the income of families. In the end, poorer families are required pay tuition fees which negated the socialized tuition fee scheme under the present STFAP.

Bracket	Family Income in Urban Areas	Tuition Fee Discount	Total Stipend Per Semester
1	0- 45,000	0	8,250
2	45, 001- 55, 000	0	7, 500
3	55, 001- 65, 000	0	6, 750
4	65, 001- 80, 000	0	4, 500
5	80, 001- 130, 000	0	0
6	130, 001- 170, 000	75	0
7	170, 001- 210, 000	50	0
8	210, 001- 250, 000	25	0
9	250, 000 and above	0	0

Table 8. Tuition Fee discounts: Proposed bracket delineation and privileges under De Dios Committee

Bracket	Annual Family Income	Applicable Scheme
A	Poorest decile	Free tuition plus standard stipend
B	36, 000- 136, 000	70% discount on base tuition fee
C	136,001- 420, 000	40% discount on base tuition fee
D	420, 001- 1, 000, 000