Alternative to Raising Tuition

Ric PatricioWhat happened to Kristel Tejada, a freshman behavioural student at the University of the Philippines (UP) Manila, should be a wakeup call for the Board of Regents/Trustees of all Higher Institutions of Learning (HIEs) anent their tuition and fee policies. Tejada’s parents were financially constrained and were unable to settle immediately the loan for her first semester tuition.

Like most HEIs in the Philippines, a student cannot enrol during the succeeding term if he/she fails to pay the outstanding accounts. This was exactly what happened to Tejada. She applied for a loan to cover the second semester but her request was disapproved. Despondent, rejected, and her dream shattered, she took her own life last March 15.

Lately, the UP Manila officials suspended (not revoked) its no-late payment policy after the faculty and students from various campuses called for the resignation of Chancellor Manuel Agulto and Vice Chancellor Josephine de Luna for their strict implementation of the perceived anti-students policy. The uproar snowballed into students demand for tuition rollback, higher subsidy to education, and the scrapping of Socialized Tuition and Financial Assistance Program (STFAP) that sets tuition rate based on household income.

This brings us to the probable panoramic tuition landscape during the first semester of this year. It is very depressing considering that about 25 percent of all privately-run HEIs (stocked or non-stocked/for profit or non-profit) shall have been implementing higher rates compared to last year’s.

Statistics show that most private HEIs have negligible non-tuition revenue to meet operating costs and capital consumption expenditures. Their subsidy from the national government is also insignificant. For optimum resource allocation and to contend with inflationary tendencies, the easy option for these HEIs is to regularly hike tuition and fees to remain viable.

Some schools are able to circumvent ways to rake in marginal revenue from fees instead of raising tuition. For instance, way back before next opening, these schools install impressive banners at conspicuous locations, announcing no tuition hike. However, energy, physical improvement, Wi-Fi connection, campus development, and all sorts of miscellaneous fees are embedded into the assessment form during enrolment for partial or full payment by the students within a semester. Others only impose tuition increase for new entrants since incoming freshmen are not represented during tuition hike dialogues, and therefore, cannot interpose objection to the new fee schedules.

In the Philippines, HEIs used to function under a triumvirate of mandate: Instruction, Research, and Extension (or Outreach). Now there are four including Production. The last one is quite important for the institution to generate revenues from auxiliary enterprises so that it will not be mainly reliant on educational revenues. Western educational institutions, on the other hand, prefer to use Development instead of Production, since the word Development is synonymous to fundraising among their stakeholders.

It is essential that our school officials should learn creative ways to sustain their programs without necessarily resorting to the vicious cycle of imposing excessive fees. Take Harvard University, for instance. It leads all HEIs in the world in terms of endowment income support to academic programs, research, faculty salaries, facilities maintenance, and financial aids. More than 60 percent of Harvard undergraduates receive need-based scholarship, with one in every five students paying no tuition according to their financial background. In spite of economic uncertainty, Harvard continues to support students from across the economic spectrum.
Last year, Harvard University ranked No. 1 with an endowment fund of $31.7 billion. The four others in the top 5 were The University of Texas ($18.3 billion), Princeton University ($17.1 billion), Stanford University ($16.5 billion) and Yale University ($15.3 billion. In the Visayas, Central Philippine University and Silliman University are the leaders, each with current endowment between PhP150-200 million, a far achievement compared to their Western counterparts but nevertheless able to highlight the fundraising imperatives.

An endowment is money kept in perpetuity with only the interest earnings spent for intended purposes. It is not a single fund but comprises of several individual funds restricted to specific uses such as, for example, support for professorial chair or creation of a packaging engineering facility. In the Philippines, the annual yield varies from 8-12 percent as compared to that in the United States which can go as high as 15 percent through effective investment management.

A cutting edge fundraising effort should be able to raise support from individuals (alumni and friends) and institutions: foundations, government, association of individuals, religious organizations. The vehicles include annual funds, special events, major gifts, grants and project funding, capital campaign, and planned giving.

Fundraising is a team effort and should first start with educating the Board of Regents/Trustees about its relevance in dampening disruptive protests whenever there is a wave of tuition hike consultation while most, importantly, generating resources (goods, ideas, funds, talents, services). The next levels are the development of the constituency map, internalization of the fundraising process, building of information base on prospects and donors, mapping strategies, campaigning, receiving, recording, monitoring, evaluating, and donor feed backing.

I will be glad to share my wealth of experiences as a professional fundraiser with those in the HEIs should there be any expressed need for my services.

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Ric Patricio is international consultant of Goducate (Go and Educate) Ltd., a Singapore-based non-stock, non-profit organization whose main platform is “Helping needy Asians help themselves”.  For comments, email ricpatricio@yahoo.com.