Issues Pertaining to the STFAP Re-bracketing and Tuition Fees

Roland G. Simbulan

Professor and Faculty Regent,

U.P. System

I had earlier made an analysis of the Socialized Tuition Fee and Assistance Program (STFAP) Committee Report, and that critique was published by the Philippine Daily Inquirer, December 31, 2006. Herein is the summation of that analysis that I submitted to the BOR and UP President which I dedicate for the Filipino youth, whom I hope may still continue to have access to the excellent education that U.P. provides.

The basis of introducing by the Atanacio committee of a new mechanism, the income function, the 4^th mechanism supplementing the previous three other mechanisms under the present STFAP, is to counter the supposed misrepresentation and lying by UP students regarding the true state of their family incomes.

But this suspicion about the tendency of UP students to misrepresent their true family incomes is not my main disagreement with the introduction of a new mechanism, the income function, to supplement the other three previous mechanisms of the STFAP. My main concerns are the following: (a) the arbitrary application of a sample from the national population to the families of incoming UP student population to determine the coefficients of the income function; and (b) the unrealistic premise, to “hold all else the same” or as they put it “ceteris paribus”.

(a) To apply coefficients for the income function Yj = BjXij + yAij + ej derived from a sample of the national population through correlation to the income characteristics of the families of incoming freshmen students from 2003-2006 is statistically flawed. For it cannot be immediately assumed that the families of incoming freshmen students for the period mentioned as well as of other future incoming UP students are typical of the whole national population. There is no inductive basis for this assumption derived from samplings in the past of the incomes of families of incoming UP students. This method of applying the characteristics of a sample of families from the national population to the families of incoming UP students simply commits the logical fallacy of accident or moving from the general to the particular. To use this faulty sampling method as the Atanacio committee did in order to justify a new bracketing through simulation techniques with “data constraints” smacks of scientific incorrectness. It resulted in turning those students formerly fully tuition-exempt and with an allowance of P6000/semester to having to pay now the present P300/unit, which also makes the method unjust.

(b) It is contended by the proponents that in the income function “asset quantities, not values, are used in the estimate procedures so that issues about depreciation and asset valuation (which I brought up in the critique of the Atanacio report ) do not arise.” With this premise, they present examples to drive home their point: “Thus, holding all else the same (underlining mine) a family with more motorbikes is likely to have higher income than one with fewer, similarly, holding all else the same, a family with more cars is likely to have a higher income than one with fewer.” But all else is not the same in the real world, that is why I brought up the question of depreciation vis-à-vis that of applying an ideal mathematical equation (with questionable coefficients even) to re-bracket incoming UP students. Indeed, playing mathematics can turn the world upside down. For a family of an incoming UP student to possess ten 1979 Toyota Corolla cars worth P75,000 each (or P750,000 for the whole batch) at present current value due to depreciation is no match financially in terms of car value to one owning a single Toyota Altis worth P900,000. But in the world of the proponents, “all things are held to be the same” ceteris-paribus, where everyone has equal influence on the economy, where there are no monopolies, no powerful politicians nor jueteng lords. To use the income function like a magic wand transforming the motorbikes, cars and appliances owned by families of incoming UP students into having the same values which do not even depreciate is to live in a nether world away from the hustle and bustle of real life where things and people grow old and depreciate.

The proponents chide the undersigned by implication that if I do not have any “superior and much less costly source of information that can independently confirm the true income status of the applicants”, then I must hold my peace. I do not claim that I have succeeded to formulate a superior mechanism, but this fact does not make the “income function” of the Atanacio committee an acceptable method (as I have pointed out) “against which the results of the STFAP screening procedure can be compared”.

On the resulting bracket assignment

The proponents contend that incoming UP students whith incomes from P80,000-P135,000, who are mostly in bracket 5 in the present STFAP P80,000-P130,000) and are tuition-fee exempt and enjoying a semestral allowance of P6,000 must now pay the present full tuition fee of P300/unit to P600/unit plus miscellaneous fees. Their argument is based on NSCB data for 2003 and with these they aver that “using relative poverty as the norm, families in the P80,000-P135,000 income range are well within the fifth to the seventh decile of the 2003 income distribution.” They conclude that: “This puts them above the usual concept of relative poverty which refers to the bottom 30-40 of families in the income distribution.” Would students with families who under the present STFAP

bracket 5 introduced in 1989 are fully-tuition exempt now be made to pay the present full-tuition of P300 or higher by simply using “the usual concept of relative poverty”? (It is not consolation at all to say as the proponents do that the P300/unit will not be the full tuition anymore under the new STFAP scheme since it isP1,000/unit and P1,500 for the extra rich.) What has caused the proponents to make a complete 300-degree turn-about from its former position that those in the present STFAP bracket 5 are deserving of tuition fee discount to the realization that they are not so deserving? After all these 15 years of implementing the current STFAP, are they saying that they have made a mistake after all in allowing those students in bracket 5 to put one over them? This blatant and unjust change of policy towards the status of families of students formerly enjoying full tuition fee discount could only be explained by the fact that they need to squeeze more revenues from UP students as government appropriations for UP is being constantly reduced. But why pass immediately the burden of supporting their education to the students as private profit-oriented universities are wont to do taking their students as so many customers.

Morever, apart from the resort to the “usual concept of relative poverty”, they are using old NSCB data of 2003 to justify the new bracketing. If we instead use the latest data of the NSO, given below as Table 1, we will see that the income bracket of P80,000-P135,000/year is way below the necessary income for a family of six (the average size of a Filipino family) to meet the daily cost of living by June 2006 which is P201,626/year (552.24/day x 365 days a year, computed from Table 1) for the whole Philippines and P245,572/year (675.54/day x 365 days a year) for NCR. Even using 2003 data for daily cost of living and not resorting to the “usual concept of relative poverty”, which does not show the real economic capacity of a family in relation to the prices of goods and services, those in the seventh decile of FIES of NSO (Table 2) of P134,473 income/year still fall below the required income/year to meet the daily cost of living in 2003 which is P168,630/year (462/day x 365 a year, from Table 1) for the whole Philippines and P203,761/year (P558.25/day x 365 days) for NCR.

Table 1: Daily Cost of Living for a Family of Six, 2001-2006 (June)

Year 2001 2002 2003 2004 2005 2006, June

Philippines 434 445.2 462 501.6 534.8 552.4

NCR 525.21 536.7 558.25 605.17 650.17 675.54

Source: NSO

Table 2: Family and expenditure survey 2003 (FIES) (National)

Decile Average Income Average Expenditure

Poorest 26,467 28,588

Second 42,354 43,556

Third 55,052 55,096

Fourth 68,863 66,147

Fifth 85,391 80,204

Sixth 106,029 98,701

Seventh 134,473 120,972

Eight 175,784 152,501

Ninth 245.939 204,834

Richest 545,836 393,191

Source: NSO

On the right of privacy

What I state in my critique of the Atanacio report is that the University must not behave like a bank or credit investigator, requiring all families of UP students applying for tuition discounts to consent in writing of having their assets and properties be counter-checked by a UP inspector. It is misplaced to compare UP students who wish to avail of tuition discounts to someone applying for a bank loan of credit card. The University is funded by the people’s taxes (including those of the families of Up students) and is non-profit public service institution unlike a bank or a private credit company. As it is, in the present STFAP, we already have many very stringent requirements, including the sending of inspectors to the homes of UP students, before a student can qualify for tuition discount. Subjecting the families of UP students to filling up a form to authorize a more thorough evaluation of its assets and properties as the regular practice of banks is to invade further the privacy of the families of UP students.

It is also important for the public to know the real merit of Tuition Fee Increase.

1. It will send the wrong signals to the parents and lawmakers alike if we will not tell the truth that the tuition fee increase is NOT THE SOLUTION TO THE NEGLECT OF UP. It can only provide some upkeep but not big enough to cause substantial difference to UP facilities. If we are to align ourselves to world class universities, fund flows will be very enormous. The question is whether this should be raised by increasing tuition fees. This brings us to the next issue.

2. The increase in tuition fees will have an effect of skewed student population shifting towards the richer families. This will disproportionately lead to a UP student populace occupied by the well-to-do families. Where is equity and balanced representation of the population?

3. The increase in tuition fees will have a domino effect on other State Colleges and Universities as well as the private universities. They will cite UP as the basis of their campaign to raise their own tuition fees. Overall, it will be the poor families who will be affected the most.

Finally, the increase of tuition and other fees which will be undertaken this coming academic year and succeeding years is undoubtedly a form of commercialization along the line of private schools. No wonder La Salle and Ateneo are being presented by the de Dios committee as examples of schools getting their service-worth from the money of their students. To make it worse, the proposal is to raise tuition by 300 percent, much higher than the yearly average of La Salle and Ateneo which is 30%. This new thrust of UP violates the very heart and soul of our leading state university. As we approach the centennial of our University, will it be said that we have lost our soul because we have abandoned our responsibility to fight for the right of every deserving UP student to have quality and affordable education?