Mar 232013
 

 

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

 

by

U.P. Academic Employees’ Union

Also read the Atanacio Report

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            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…..

         Yj = βiXij + γiAij + εj ,

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.

 

1)     Results and implications of using the income function

 

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 ?

 

2)     The maximum  income as the ultimate basis of STFAP bracket.

 

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.

 

 

5 ) Recommendations

 

>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.

2)  To make sure  that the poor but talented students can still study in UP .

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.

 

 

 

 

Report of the Committee to Review the

Socialized Tuition and Financial Assistance Program (STFAP)

Prof. Edgardo G. Atanacio Prof Emmanuel F. Esguerra

Prof. Rene P. Felix ,November 2006

2.1. Adopt the following alphabetic bracketing scheme:

Bracket Annual Family Income Fees / Benefits

A More than P1,000,000 Full-cost tuition fee (base × 1.5), full

miscellaneous and laboratory fees

B P500,001 to P1,000,000 Base tuition fee, full miscellaneous and

laboratory fees

C P135,001 to P500,000 40% discount on base tuition fee, full

miscellaneous and laboratory fees

D P80,001 to P135,000 70% discount on base tuition fee, full

miscellaneous and laboratory fees

E Up to P80,000 Free tuition, miscellaneous, and laboratory

fees plus standard stipend

In terms of national income percentiles, these brackets correspond approximately

to:

Bracket A: 100th percentile

Bracket B: From 98th percentile to 99th percentile

Bracket C: From 67th percentile to 97th percentile

Bracket D: From 42nd percentile to 66th percentile

Bracket E: Up to 42nd percentile

Constituent universities/campuses will be grouped into two categories:

Constituent University / Campus Base Tuition Fee

Group I: Diliman, Los Baños, Manila P1,000

Group II: Baguio, Mindanao, San Fernando, Visayas P600

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

Bracket Group I Group II

A P1,500 P1,000  B 1,000 600  C 600 400  D 300 200  E 0 0

Miscellaneous fees will basically be adopted from the proposal of the ad hoc

committee:

Constituent University / Campus Miscellaneous Fees

Diliman, Los Baños P2,000  Manila 1,950  Baguio, San Fernando, Visayas 1,405

Mindanao 1,640

Appendix A: Estimating the income function

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

income, or possibly even hint at unreported income.

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

surveys according to specific variables of interest.

The income function to be estimated is specified as follows:

Yj = βiXij + γiAij + εj ,

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

ordinary least squares; the results are reported in Table A2.

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

FIES and LFS.

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

the national level data for estimating the income function.

A-2

Statement of the Applicant’s Parent/Legal Guardian/Spouse

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

team to visit my home/residence to verify the veracity and accuracy of the

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

mean suspension or withdrawal of STFAP benefits and privileges of my

son/daughter/dependent/spouse.

Date: ____________ ______________________________________

Printed Name of Parent/Legal Guardian/Spouse

Comments on the final Report: De Dios Ad Hoc

Committee to Review Tuition and Other Fees

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.

 

STFAP brackets and applicable tuition fee discounts:

 

 

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

Source: UP STPAF Bulletin (2001) as cited by De Dios Com.

 

 

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

 

The date posted here is due to our website rebuild, it does not reflect the original date this article was posted. This article was originally posted in Yonip in Dec 28th 2006

 

 

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