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PN 2017-03: Who Benefits and Loses from an Untargeted Tuition Subsidy for Students in SUCs?

The proposed policy to provide free tuition for students enrolled in state universities and colleges (SUCs) looks appealing. The question, however, is whether it can better implement the constitutional mandate of the state to protect and promote the right of all citizens to quality education compared to other alternatives. This Policy Note finds that free tuition in SUCs can do more harm than good for a number of reasons. Among others, it is antipoor. Because free tuition involves only partial financing and tuition fee is just a fraction of the total cost of higher education, those who will likely benefit from it are students from richer households as they have the resources to finance the rest. Free tuition fee in SUCs can also tilt the enrollment in favor of them because of the cheaper cost of education. The budget that will be allocated to implement this policy will also likely crowd out investments for infrastructure, agriculture, K to 12, and other high-priority propoor development programs. In lieu of the free tuition in SUCs, this Policy Note recommends fully funding the Unified Student Financial Assistance System for Tertiary Education, which has ample avenues for democratizing access to tertiary education through various student financial assistance programs (grants-in-aid, scholarships, and student loans) and provides full financing of tertiary education.

Philippine Institute for Development Studies
Authors Keywords
Orbeta, Aniceto Jr. C.; Paqueo, Vicente B.; Philippines; higher education; education; higher education institutions; student loans; free tuition; tuition subsidy; state universities and colleges; SUCs; student financial assistance program; Unified Student Financial Assistance System for Tertiary Education; scholarships;
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