Out-of-State Students (But Not Iowans) Could Subsidize Financial Aid at Iowa Universities

Leaders of the public universities in Iowa are looking at making out-of-state students and not residents subsidize student financial aid. 

Recently, the Iowa Board of Regents came under criticism about a little-known practice called tuition-set aside. Tuition set-aside required a minimum of 15 percent - and as much of 24 percent - of tuition revenue go to subsidizing the cost of education for other students through student financial aid.

Lawmakers and others said it wasn't fair for hard-working families to pay more money so a portion could go to others. 

The regents asked the state to set up a state-funded scholarship program, but lawmakers have not funded it.

A regent policy change on the agenda for a Wednesday-Thursday board meeting calls to separate in-state and out-of-state students.

The proposed policy specifies that universities are prohibited from using any tuition from undergraduate students from Iowa for financial aid. However, the universities can designate portions of the tuition revenue collected from out-of-state students, which pay about three times more than Iowans, for student aid. 

It's not clear how much out-of-state tuition could be used for financial aid. A late message to the regent spokeswoman wasn't returned.