In a position paper submitted to Executive Secretary Salvador Medialdea, the country's economic managers argued against a proposed policy to provide free tuition to all undergraduates enrolled in state universities and colleges (SUCs). Secretaries Ernesto Pernia, Carlos Dominguez, and Benjamin Diokno noted that a wiser approach would be to fully finance the Unified Student Financial Assistance System for Tertiary Education (UNFAST) law. This alternative, they emphasized, is aligned with the position of senior researchers of state think tank Philippine Institute for Development Studies (PIDS).

In a recent policy note released by PIDS, Aniceto Orbeta and Vicente Paqueo outlined the disadvantages of supporting the free tuition fee policy.

Established in 2014, the UNIFAST is designed to "unify and harmonize all modalities of publicly-funded student financial assistance programs such as scholarships, grants-in-aid, and student loans for tertiary education".

Consistent with the views of Orbeta and Paqueo, the economic managers all agreed that the UNIFAST's design provides a more comprehensive alternative for enabling poor households to access higher education in SUCs.

UNIFAST provides full financing through the three types of financial assistance, which are applicable to both SUCs and private higher education Institutions. Entry would be determined by student test scores, assuring taxpayers that grants are only given to hardworking students who deserve it, and compliance with acceptable standards defined by the Commission on Higher Education.

In contrast, the free tuition policy fails to capture the complexity of higher education, and may result in unintended consequences.

"While we commit to the constitutional provision mandating the State to protect and promote the right of all citizens to quality education and to make such education available to all, we do not agree that providing an across-the-board free tuition for all undergraduate students in all SUCs is the best way to achieve this mandate," said Pernia, Dominguez, and Diokno in their statement.

Iterating points from the PIDS study, they pointed out several weaknesses of the free tuition scheme.

First, the cost of tuition covers only a third of what an average student needs to get through college each year. This will likely result in the unintended consequence of benefiting the "nonpoor students" attending SUCs.

"Only 12 percent of the students attending SUCs belong to the bottom 20 percent of the family income classification based on the Annual Poverty Indicator’s Survey," said the managers.

Orbeta and Pacqueo said this measly share of poor students in the SUC population has not changed, "despite the expansion of enrollment in public HEIs from 35 percent in 19990 to 52 percent in 2014".

In other words, the free tuition scheme is only going to benefit the children who already have access to SUCs. Those who do not have access will have to shoulder the bigger chunk of the costs of higher education, including living expenses and instructional materials.

Another unintended consequence would be the flight of richer students from HEIs to SUCs, which is bound to trigger a domino effect on faculty retrenchment, threaten the existence of HEIs, and ultimately result in the decline in 'overall quality of graduates'.

The managers pointed out: "Using government funds for tuition subsidy will effectively transfer the financial burden of free college education to the poor, given the regressive nature of the country’s overall tax incidence."

Lastly, the scheme is unsustainable. For 2017, the General Appropriations Act allocated PHP 8 billion for SUCs’ undergraduate enrollees. There are 1.4 million students enrolled in SUCs. The country would have to spend 28 PHP billion to cover the PHP 20,000 budget per head per annum.

In conclusion, the economic managers deemed the full financing of UNIFAST as a more targeted, more comprehensive alternative to the free tuition scheme.

If you wish to learn more about the policy note, you may download a copy here

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