Questions Raised About Tuition That Goes Toward Scholarships

Ann McClure's picture

A decades-old scholarship fund that redistributes tuition money collected from all public university students is for the first time drawing scrutiny from outraged legislators.

The University of Iowa, Iowa State University and University of Northern Iowa have responded to sharp questioning from Republican lawmakers with a pledge to disclose that about 20 percent of every student’s tuition bill pays for scholarships based on need and academics.

Last year, the money paid out totaled $144 million. Legislators have highlighted that nearly $1,400 of an Iowan’s $7,500 tuition bill at Iowa State University goes to pay someone’s else tuition. Similar redistribution of tuition dollars occurs at the University of Iowa and University of Northern Iowa.

The practice known as tuition set-aside, while not unique to Iowa, has flown under the public radar because for more than two decades the policy has only been discussed at state Board of Regents meetings, which are open to the public but not widely attended.

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