2006 - Tuition Fee Report - Atanacio et al.pdf

Report of the Committee to Review the Socialized Tuition and Financial Assistance Program (STFAP)

Executive Summary

1. Results of the Study

There is a need to restructure the STFAP and, in agreement with the proposal of the ad hoc committee, the number of STFAP brackets should be reduced from nine to five, with adjusted fee subsidies and benefits. The current procedure for the current numerical bracketing scheme will be difficult to adapt to the new alphabetic bracketing. A modified procedure is needed that can be readily updated and will have a more objective basis for the assignment of brackets.

2. Recommendations 2.1. Adopt the following alphabetic bracketing scheme:

Bracket Annual Family Income Fees / Benefits

A More than P1,000,000 Full-cost tuition fee (base × 1.5), full miscellaneous and laboratory fees

B P500,001 to P1,000,000 Base tuition fee, full miscellaneous and laboratory fees

C P135,001 to P500,000 40% discount on base tuition fee, full miscellaneous and laboratory fees

D P80,001 to P135,000 70% discount on base tuition fee, full miscellaneous and laboratory fees

E Up to P80,000 Free tuition, miscellaneous, and laboratory fees plus standard stipend

In terms of national income percentiles, these brackets correspond approximately to: Bracket A: 100th percentile Bracket B: From 98th percentile to 99th percentile Bracket C: From 67th percentile to 97th percentile Bracket D: From 42nd percentile to 66th percentile Bracket E: Up to 42nd percentile Constituent universities/campuses will be grouped into two categories:

Constituent University / Campus Base Tuition Fee Group I: Diliman, Los Baños, Manila P1,000 Group II: Baguio, Mindanao, San Fernando, Visayas P600 The tuition fee per unit for Group II will be ⅔ of the tuition fee for Group I: Bracket Group I Group II A P1,500 P1,000 B 1,000 600 C 600 400 D 300 200 E 0 0

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Miscellaneous fees will basically be adopted from the proposal of the ad hoc committee:

Constituent University / Campus Miscellaneous Fees Diliman, Los Baños P2,000 Manila 1,950 Baguio, San Fernando, Visayas 1,405 Mindanao 1,640

2.2. Use the following general procedure for bracketing STFAP applicants:

a. Assign the bracket requested by the applicant. b. Assign a bracket based on the reported income of the student, which is the sum

of father’s income, mother’s income, guardian’s income, spouse’s income, own income, contributions from siblings and relatives, income from property, and income from other sources.

c. Use an income function based on the latest Family Income and Expenditures Survey (FIES) and the Labor Force Survey (LFS) to predict the income of STFAP applicant. Use the predicted income to determine the bracket of the applicant.

d. Assign a bracket based on other indicators, including indicators of high socio-economic status.

e. Get the highest bracket based on the different brackets arrived at in a-d. f. Adjust the bracket based on the previous year’s bracket or on other siblings’

brackets. g. Assign those who did not file applications to Bracket A if the family income that

they declared when they confirmed their admission to U.P. is greater than P1,000,000. Assign those who did not file applications to Bracket B if the family income that they declared when they confirmed their admission to U.P. is P1,000,000 or less.

2.3. Review and update the income function and application form every three years as

the latest FIES and LFS are released by the National Statistics Office. 2.4. Run the two STFAP bracketing schemes (alphabetic and numeric) concurrently for

five years. The procedures for bracketing the old students under the existing numeric STFAP system will remain unchanged.

2.5. Offer an online STFAP application service to accommodate a possible high number

of applications due to the increase in tuition and miscellaneous fees. 2.6. Develop the data processing systems for both online and batch processing of

STFAP applications for the alphabetic bracketing scheme as soon as possible. Estimated minimum development and testing time is around three months. Additional manpower to process the applications for the new alphabetic scheme will be needed.

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2.7. Strengthen the Student Loan Board system to accommodate: a. Students who may not qualify for full scholarships or tuition subsidies but may

encounter cash flow problems with the increased tuition. b. Students who may submit their applications late and will not receive their

assigned brackets in time for the registration. 2.8. Explore the possibility of allowing the payment of tuition and other fees on

installment basis to assist the two categories of students identified in 2.7. Committee to Review the Socialized Tuition and Financial Assistance Program (STFAP) Prof. Edgardo G. Atanacio Prof. Emmanuel F. Esguerra Prof. Rene P. Felix November 2006

Report of the Committee to Review the

Socialized Tuition and Financial Assistance Program (STFAP)1

Following is the report of the committee to review the Socialized Tuition and Financial Assistance Program (STFAP), which was constituted by UP Pres. Emerlinda R. Roman in July 2006. It deals mainly with the restructuring of the STFAP that is to accompany the proposed increase in tuition fees, and matters related to its implementation. After a brief backgrounder, this report describes the “new” STFAP structure, the means-testing to determine student eligibility for the tuition subsidy, the mechanics for implementing the subsidy scheme, its implications on the University’s financial flows, and the proposed procedures. 1. Background

A committee to review the Socialized Tuition and Financial Assistance Program (STFAP) was constituted by UP Pres. Roman in July 2006 following the submission of a study conducted by an ad hoc committee formed in 2005 to review tuition and other fees in the University. In its report, the ad hoc committee noted that since 1989, when tuition fees in UP were adjusted to levels (P300 and P200 per unit for Diliman and regional campuses, respectively) at par with those prevailing in comparable private universities in the country and a program of socialized tuition-fee discounts based on ability to pay was introduced, the University had not adjusted its fee structure in the face of continuing price-inflation. This situation has resulted in the erosion of the real value of tuition fees to just one-third of their 1989 levels today even as nominal incomes had risen three-fold on average. Consequently, students who are in a position to shoulder the full cost of a UP education have been able to enjoy an unintended subsidy at the same time that students deserving of financial assistance under the University’s STFAP have had to make do with stipends greatly reduced in real value by inflation.

Thus, the ad hoc committee recommended raising the undergraduate base tuition fee from P300 to P1,000 per unit in the Diliman, Manila and Los Baños campuses and from P200 to P600 per unit in Baguio and the Visayas and Mindanao units. Envisioned to take effect in June 2007, and only for incoming freshmen, this proposed adjustment attempts to merely restore the real value of UP’s tuition fees to the level which had already been deemed reasonable in 1989. The committee also recommended increases in prevailing miscellaneous fees charged by the autonomous units in order to help defray the most important recurring costs faced by the University, namely, electricity, maintenance of the Internet infrastructure, and the University library’s book and serial collections.

The tuition-and-other-fees review committee, moreover, recommended continuation of the University policy to assess UP students amounts equal to, less than, or greater than the base (or inflation-indexed) tuition fees in keeping with the principle that “students who can afford (it) should pay at least the full cost of their UP education as tuition fees, and students who cannot should be granted subsidies in the form of discounts in tuition and other fees, book allowances and monthly stipends.” Specifically, the committee recommended the reduction in the number of STFAP brackets from nine to five, the standardization of the semestral stipend to P12,000, and the designation of a special bracket for students coming from families that belong to the richest percentile in the income distribution, whether national or among entering freshmen. Students assigned to this bracket shall be charged 1.5 times the base tuition fee. 1 The STFAP review committee thanks Geoffrey Ducanes and Donald Ngwe for their excellent

research assistance.

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The ad hoc committee also recommended a triennial review and readjustment of the

base-tuition fee with reference to which the magnitude of discounts and the coverage of stipends that the University may be willing to offer in the future can be determined. 2. The new tuition fee structure

Table 1 below summarizes the key features of the new (or proposed) tuition fee structure in comparison with those of the existing one.

Table 1: Features of the existing and proposed tuition fee structure Feature Proposed Existing

Base tuition P1,000 per unit* P300 per unit** Number of STFAP brackets 5 (1 non-paying) 9 (5 non-paying) Tuition discounts 100, 70, 40 percent 100, 75, 50, 25 percent Stipend per semester P12,000 P6,750*** Highest income bracket tuition 1.5 times the base tuition Base tuition

* Applicable fees in Baguio, San Fernando, Visayas and Mindanao are 60 percent of this. ** Applicable fee in Los Baños is P250 per unit, while P200 for other regional units. *** This is an average for Brackets 1-4. The amount starts at P8,250 per semester for Bracket 1 and declines

to P4,500 per semester for those in Bracket 4.

As proposed by the ad hoc committee to review tuition and other fees, only two base tuition rates shall be in effect under the new scheme for two groups of campuses compared with three under the existing structure. The number of STFAP brackets is also reduced from nine (9) to five (5), the first five brackets that are entitled to a full discount under the current structure being collapsed into a single non-paying bracket under the restructured scheme. In addition, the stipend per semester is standardized at P12,000, whereas under the existing scheme four brackets (1-4) receive differentiated stipend amounts. Finally, whereas the highest income bracket is asked to pay the base tuition fee under the existing structure, in the proposed one, it is asked to pay at least 1.5 times the base tuition. This last feature is added in recognition of the wide differential in mean incomes between students belonging to the ninth and tenth deciles of the income distribution, whether of UP freshmen or the entire population of Philippine households (see Table 3).

To distinguish the proposed scheme from the existing, we refer to the former as the “alphabetic”, and the latter as the “numeric”, bracketing scheme. (It should be noted that, since the adjusted tuition fees shall apply only to the entering freshman class, the two STFAP schemes shall be in effect until such time that the cohort of 2006-2007 has graduated.) In the alphabetic scheme, Bracket A corresponds to the highest socio-economic bracket and Bracket E the lowest.2 (Table 2)

Table 2: STFAP alphabetic bracketing scheme Bracket Annual family income

(in pesos) Per unit tuition fee

Group I Per unit tuition fee

Group II Semestral

stipend A Greater than P1,000,000 P1,500 P1,000 N.A. B P500,001 – P1,000,000 P1,000 P600 N.A. C P135,001 – P500,000 P600 P400 N.A. D P80,001 – P135,000 P300 P200 N.A. E P80,000 or less 0 0 P12,000

Group I: Diliman, Manila, Los Baños Group II: Baguio, Visayas, Mindanao

2 This reverses the original assignment of income groups to the alphabetic brackets (see Table 8 of

ad hoc committee report) to make the bracketing consistent with the common practice of assigning the letter “A” to the richest income group and succeeding characters to lower income groups in descending order.

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Students in the lowest income bracket (E) with annual family incomes of P80,000 or less shall pay no tuition, laboratory, and miscellaneous fees and receive a semestral stipend of P12,000, while those in the highest income bracket (A), with annual incomes above P1,000,000, shall pay P1,500 tuition per credit unit in the Diliman, Manila, and Los Baños campuses or P1,000 in the Baguio, Visayas, and Mindanao campuses. The distribution of family incomes among admitted freshmen in 2004 is the basis for drawing the boundaries between the socio-economic brackets.

Assuming that the income profile of entering UP students stays the same as in 2004 (the year for which the UP data cited below are available)3, close to 80 percent of admitted freshmen will be paying less than the “full cost” of a UP education under the proposed STFAP structure (column 2, Table 3 below); that is, if full cost is defined as P1,000 per unit4. Bracket E students, who will enjoy full discount and a semestral stipend, will comprise more than 20 percent, while a similar percentage will be in Bracket D paying P300 per unit. Only the richest 20 percent will actually be paying the full cost; the greater proportion – about 40 percent – will be paying P600 per unit, or double what they are currently paying.

Table 3: Income distribution of incoming UP freshmen and the national income distribution

Income Decile

Maximum Income of Freshmen

Average Income of Freshmen

Maximum Income,

Philippines

Average Income,

Philippines Poorest 36,000 13,510 35,803 26,467 Second 65,000 52,187 48,584 42,354 Third 98,169 80,608 61,601 55,052 Fourth 135,140 116,216 76,340 68,863 Fifth 182,239 159,687 94,679 85,391 Sixth 247,264 215,472 118,480 106,029 Seventh 340,000 288,047 151,625 134,473 Eighth 509,200 417,122 203,318 175,784 Ninth 700,000 591,795 301,516 245,939 Richest 8,105,000 1,186,699 32,256,048 545,836

Since the actual distribution of freshmen entrants may, however, be different from

one year to the next depending on various factors (e.g., UPCAT passing rates, show rates, etc.), a better way to appreciate the new STFAP structure is to see how the proposed brackets map to the national income distribution. With the new STFAP bracketing scheme, students up to the fourth decile, along with some from the fifth (approximately the 42nd percentile) of the national distribution (refer to column 4), shall be entitled to free tuition and a stipend (Bracket E). Those coming from families in the fifth up to the seventh deciles (approximately the 66th percentile) shall be in Bracket D with a 70 percent discount. Bracket C with a 40 percent discount includes students from the seventh all the way up to the richest decile of the national distribution. This is because the income profile of UP students (columns 2 and 3) is markedly different from the national distribution (columns 4 and 5). Note that the top three income deciles in the UP distribution belong to the richest decile in the national distribution. In effect, UP students coming from families up to the 97th percentile of the national income distribution (maximum annual family income of P500,000) shall continue to enjoy a tuition subsidy even under the restructured STFAP. Thus, it is accurate to say that

3 It should be noted, however, that such figures are based solely on students’ declared incomes and

thus are likely to be understated. 4 In fact, full-cost tuition is really closer to P1,500 per unit based on estimates of direct cost of

undergraduate instruction at UP (Table 5, Report of ad hoc committee to review tuition and other fees). This implies that all but the richest 3-5 percent will continue to be subsidized by the state.

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only those students who come from the most affluent families will be asked to pay full-cost or near full-cost tuition.

For reasons of vertical equity, it should not be objectionable then that a bracket (Bracket A) is being included to cover students from the richest percentile(s) who will be assessed 1.5 times the base tuition fee – although the mechanism for implementing this needs fleshing out. Table 4 reinforces this point by presenting the national distribution of income by quantiles. As a closer inspection of the national data reveals, the highest income for families in the 19th quantile (or 95th percentile) is less than P500,000, placing students in this income group no higher than Bracket C. This means that the full effect of the proposed hike in UP tuition fees is likely to be felt only by those students whose families belong to the richest 3 percent of the population. This accounts for approximately 20 percent of UP’s entering class going by 2004 data.

Table 4: STFAP brackets, income distribution of incoming UP freshmen, and the national income distribution by quantile

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Quantiles BracketMaximum Income

(UP)

Maximum Income

(National) 1 2 3 4 5

E 36,000

65,000

27,851 35,803 42,412 48,584 54,957

6 7 8

D 98,169

135,140

61,601 68,770 76,340

9 10 11 12 13 14 15 16

C

182,239

247,264

340,000

509,200

85,515 94,679

105,342 118,480 133,652 151,625 174,465 203,318

17 18 19

B 700,000242,004 301,516 420,286

20 A 8,105,000 32,256,048 3. Determining eligibility under STFAP

The determination of whether a student qualifies for a tuition fee discount under STFAP is essentially a problem of determining whether the student’s socio-economic status as measured by family income classifies him or her as being in Brackets C, D, or E. This process is not costless and requires that families at the very least are willing to cooperate with the University in answering very personal questions relating to their finances. It also assumes that the University has the means to verify the information supplied given all the incentives and opportunities of subsidy applicants to conceal or under-report their incomes and assets.

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3.1 The current system

The basis for determining how much tuition and miscellaneous fees a UP student should pay, as well as whether he/she qualifies for some form of financial assistance, under the current STFAP scheme is capacity to pay as measured by annual family income with the cut-offs for the income brackets adjusted for family size and region of residence (i.e., whether Metro Manila, other urban areas, or rural areas) [STFAP Bulletin, March 2003].

As a general rule, income tax returns and/or declared income, assets and liabilities of the applicant’s parents or guardians are used to determine the student’s capacity to pay. “However, the University reserves the right to use other bases, including home visits, in determining financial assistance, and in determining the kind and amount of assistance to be extended.” [STFAP Bulletin, March 2003]. Based on the information gathered, a student is assigned to one of nine income brackets.

In practice, the information collected from the STFAP 16-page application form is processed to determine a student’s income bracket.5 This involves an exercise that considers the applicant’s desired bracket based on declared family income, assets owned, and such other income-related characteristics as region of residence, high school type, residence type, including electricity expenditures. Separate bracketings are done based on an evaluation of the (i) applicant’s declared family income; (ii) the applicant’s adjusted family income (which includes incomes of all income earners living with the family); (iii) other socio-economic variables (e.g., ownership of certain assets, number of household help, and whether the family employs full-time gardeners, security guards, etc.); and (iv) electricity expenditures. An applicant may be classified under one income bracket using declared income as criterion, but may be grouped in a different bracket (higher or lower) based on another criterion or set of criteria. An applicant’s final bracket is the highest one to which he/she has been assigned based on items (i)-(iv). In case a student wishes to contest his/her bracket assignment, he/she may appeal to the committee on scholarships and financial assistance of the constituent university.

The main limitation of the current system is that the relative weights given to the family attributes used to evaluate students’ incomes are not derived from an empirically verifiable procedure that can be replicated. As such, the weights are less than objective, being greatly dependent on the intuition or “best guess” of the evaluating committee about the relationship between each of the attributes being considered and family income. This approach is not inherently wrong6. Its principal drawback, however, is that a committee with a different membership could arrive at an entirely different result depending on its members’ intuition or “best guess.” As such, the procedure for determining STFAP eligibility can always be challenged on grounds of being largely ad hoc, that is, as lacking an objective basis for judging in which income bracket a particular STFAP applicant ought to be classified. The procedure can also prove to be intractable after some period of time or after several changes in the composition of the evaluation committee.

That said, it is understandable why the implementers of STFAP resorted to the screening procedure described above: in 1989, when the STFAP was instituted, access to nationally representative household incomes and expenditures data was quite limited, precluding a more systematic, i.e., objective, procedure. The shortcoming, however, is that

5 Some observers have noted that the length of the application form can deter applicants. On the

other hand, this makes it more likely that only those students who truly need financial assistance will take the trouble to apply for a tuition fee discount under STFAP.

6 Some indicators used currently for bracketing under the existing STFAP scheme in fact turn out to be strong predictors of family income (e.g., electricity expenditures, number of household help) in a statistical sense.

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such a procedure continues to be used today to determine bracketing when household level data that can be used to inform the University on the relationship between family income and a host of income-related family variables are more easily available, and computing power has become relatively cheap. 3.2 The proposed system

The major change proposed is in the utilization of nationally representative data to first show the relationship between annual family income and a host of socio-economic and demographic variables hypothesized to be strongly related to income. This can be done by estimating a family income function with family characteristics, including important items of expenditure and ownership of certain assets, as arguments (see Appendix A). The nationally representative data recommended for use are those from the Family Income and Expenditures Survey (FIES) and the Labor Force Survey (LFS). Both data sets are regularly collected and generated by the National Statistics Office (NSO), the former every three years, the latter every quarter of the year. The FIES contains information on household incomes from all sources and household expenditures on a broad range of items. The LFS contains information on, among others, the age, education, and employment profile of every household member. About 40,000 plus households all over the country are covered by the two surveys.

The income function estimated using the LFS and FIES data will generate parameters showing how the various family level variables are related to annual family income. These estimated parameters can then be used to predict the income of STFAP applicants based on the information gathered from their application forms. To make this possible, however, it is necessary that the same type of information gathered from the two national surveys also be asked in the STFAP questionnaire, and, more importantly, that they be encoded similarly (see Appendix A). The committee’s recommendations pertaining to the STFAP application form incorporate this concern.

The proposed bracketing, however, shall not rely solely on predicted income but use as well other information supplied by the STFAP applicant, such as reported or declared family income, high school tuition paid, and some other indicators of socio-economic status (e.g., ownership of a swimming pool, international credit card/s) that are not normally captured in the FIES. For example, an entering freshman who had previously studied in a high school that charged P45,000 a year without any scholarship would be classified in Bracket B.

Essentially, then, the determination of eligibility for tuition fee discounts under the proposed STFAP alphabetic scheme shall involve the following steps:

a. Bracket using the bracket (C, D, or E) requested by the student in the application

form. [B1] b. Bracket using the reported family income of the student, which is the sum of

father’s income, mother’s income, guardian’s income, spouse’s income, own income, contributions from siblings and relatives, income from property, and income from other sources. [B2]

c. Bracket using the predicted income using the income function generated from the FIES/LFS and the information supplied by the student. [B3]

d. Bracket using the annual fees paid either in high school if a new college student, or school fees in previous college if a transferee, given that the student was not a scholar. Also assign the student to bracket A if indicators of high socio-economic status are present (e.g., with security guard, with swimming pool, etc.). [B4]

e. The final bracket is the highest bracket assignment based on steps a-d. That is, Final bracket = max (B1, B2, B3, B4).

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f. Adjust the final bracket as necessary based on other factors, such as other siblings’ STFAP brackets.

The proposed scheme thus retains an important feature of the current system in

considering alternative bracket assignments initially and then determining the final bracket assignment based on the highest bracket assignment of the applicant among the alternatives. The innovation introduced is in the use of nationally representative data (step c) to determine the relationship between annual family income and non-income variables, and then to use the parameters generated from the income function with the information from STFAP applicants to predict their incomes as a basis for bracket assignment. This reduces the degree of subjectivity involved in using the information on assets to determine an applicant’s bracket. Moreover, the parameter estimates generated from the income function can be updated regularly as new information from the FIES and LFS become available. The committee recommends a review of STFAP every three years to coincide with the tuition fee review to be conducted as recommended by the ad hoc committee to review tuition and other fees.

As under the current system, applicants who wish to contest their bracket assignment may appeal to the committee on scholarships and financial assistance of the constituent university.

3.3 Differentiating Bracket A from Bracket B

Under the current STFAP scheme, students who do not apply for tuition discounts are assigned to the highest income bracket, Bracket 9. Under the proposed scheme, however, it is recommended that Bracket B be the default bracket. One reason is administrative ease; making Bracket A the default bracket would invite too many applications. Families otherwise willing to pay the P1,000 per unit tuition fee in order to be spared the inconvenience of filing an STFAP application may find avoiding to pay P1,500 enough incentive to apply. Since Bracket A students, those with annual family incomes more than P1,000,000, comprise no more than 4-5 percent of the entering class (based on 2004 statistics), the additional cost of processing applications in order to determine who should properly be classified in Bracket A may not be commensurate to the potential addition in revenue. Still, the question remains: how to differentiate Bracket A students from Bracket B when the latter is the default bracket.

The committee recommends identifying Bracket A students based on self-declaration of incomes. A question about family income is already included in the UPCAT application form and this can be used as a basis for tuition fee assessment when the student enrolls, unless there is a change in personal circumstances. As an additional incentive for students to reveal their true income status, the University may want to consider opening an “express” or “special assessment” lane for those in Bracket A. 4. Effect on UP’s financial flows

In order to get a sense of how the new fee structure is going to affect the University’s financial flows, it is important to consider that more students may be applying for STFAP in light of the higher base tuition fee (and stipend for bracket E students).

Under the current scheme, tuition fee discounts and stipends are extended (in theory) to students whose family incomes are P250,000 and below. In 2004, 1,592 freshmen applied for scholarships out of an entering class of 6,684 (Table 5). Among the enrolled freshmen, 4,063 had declared incomes of P250,000 or less. Hence, among the students that should have been entitled to subsidies, 39 percent chose to file an application with the STFAP.

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Table 5: Entering Freshmen in 2004 by income bracket based on declared incomes

In 2004, 4,208 incoming freshmen had declared incomes of up to P500,000. Suppose one makes the assumption that, in general, 39 percent of students eligible (by declared income alone) for STFAP subsidies choose to file an application. Then if the currently proposed STFAP structure was in effect, 1,641 would have applied for scholarships.

It may be argued, however, that 1,641 STFAP applications is probably a low estimate because a P1,000 base tuition fee is a much stronger incentive to apply for a scholarship than a P300 base, whichever income range is concerned. In other words, it can easily occur that the number of applications might double, even just among students belonging the P250,000 and below income range.

Hence, the following simulations project revenue flows for application rates of 40, 50, 65, and 80 percent. Only declared income is used as a basis for bracket assignments in the simulations because it is the only indicator that is uniformly available for the whole entering class. It is assumed, therefore, that for every given bracket from C to E, 40-80 percent of targeted students will apply to their appropriate brackets and that each application will be successful. It is further assumed that 40-80 percent of students who belong to bracket A will be identified and charged P1,500 per unit. The students who choose not to apply and are not assigned to bracket A will automatically fall into bracket B.

The results for one semester, assuming a 15-unit credit load per student, are shown in Tables 6, 6a, 6b, and 6c. Inflows consist of revenue from tuition fees and miscellaneous fees. Outflows consist of payments of stipends.

Depending upon the application rate assumed for STFAP, revenue from tuition and miscellaneous fees range from P85.1 million (40 percent application rate) to P68.1 million (80 percent application rate). With stipends ranging from a low of P8.2 million to a high of P16.4 million, net inflows for one semester from freshmen enrollees would be anywhere between P51.7 and P76.9 million. Relative to the P40 million7 that the University currently receives from tuition and miscellaneous fees, this means an additional P12-36 million in revenues for the University for one semester, or roughly P24-72 million a year.

7 This is a very rough estimate. Based on very aggregative information available, only receipts from

tuition and miscellaneous fees per semester per year level could be estimated. It was assumed that each year level accounted for the same proportion. Information regarding stipends for STFAP was also not readily available and could not be netted out. This yielded a ballpark figure of about P40 million per semester per year level.

Diliman Manila Los Banos Baguio San Fernando Cebu Tacloban/Palo Iloilo/Miagao Mindanao TotalBracketA 1,000,000+ 172 43 37 13 2 0 1 8 1 277B 500,001-1,000,000 543 130 257 81 15 19 10 32 12 1099C 135,001-500,000 1107 194 706 217 37 67 99 155 57 2639D 80,001-135,000 374 54 257 84 20 44 42 60 28 963E 0-80,000 504 79 465 143 19 82 105 235 74 1706Total 2700 500 1722 538 93 212 257 490 172 6684

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Table 6: SIMULATION OF ONE-SEMESTER FINANCIAL FLOWS(Using 2004 data for enrolled freshmen)40 percent STFAP application rate

Diliman Manila Los Banos Baguio San Fernando Cebu Tacloban/Palo Iloilo/Miagao Mindanao TotalBracketA 69 17 15 5 1 0 0 3 0 111B 1837 352 1136 355 62 135 158 307 108 4450C 443 78 282 87 15 27 40 62 23 1056D 150 22 103 34 8 18 17 24 11 385E 202 32 186 57 8 33 42 94 30 682Total Enrollees 2700 500 1722 538 93 212 257 490 172 6684STFAP Applicants 794 131 571 178 30 77 98 180 64 2123InflowsTuition fees* 33,764,400 6,462,600 20,377,200 3,896,400 681,000 1,426,800 1,717,800 3,253,200 1,148,400 72,727,800Miscellaneous fees 5,400,000 975,000 3,444,000 755,890 130,665 297,860 361,085 688,450 282,080 12,335,030Subtotal 39,164,400 7,437,600 23,821,200 4,652,290 811,665 1,724,660 2,078,885 3,941,650 1,430,480 85,062,830OutflowsStipend Allocation** 2,419,200 379,200 2,232,000 686,400 91,200 393,600 504,000 1,128,000 355,200 8,188,800Net flow 36,745,200 7,058,400 21,589,200 3,965,890 720,465 1,331,060 1,574,885 2,813,650 1,075,280 76,874,030

Inflow at full cost tuition + misc fees*** 66,150,000 12,225,000 42,189,000 12,860,890 2,223,165 5,067,860 6,143,585 11,713,450 4,152,080 162,725,030Subsidy from tuition discounts 26,985,600 4,787,400 18,367,800 8,208,600 1,411,500 3,343,200 4,064,700 7,771,800 2,721,600 77,662,200

Effective total subsidy**** 29,404,800 5,166,600 20,599,800 8,895,000 1,502,700 3,736,800 4,568,700 8,899,800 3,076,800 85,851,000

*Assuming a 15-unit load per student**12,000 each for students in Bracket E***Everyone pays 1,500 per unit plus corresponding miscellaneous fees****Tuition discount + stipend

Freshman Enrolment by Campus

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Table 6a: SIMULATION OF ONE-SEMESTER FINANCIAL FLOWS(Using 2004 data for enrolled freshmen)50 percent STFAP application rate

Diliman Manila Los Banos Baguio San Fernando Cebu Tacloban/Palo Iloilo/Miagao Mindanao TotalBracketA 86 22 19 7 1 0 1 4 1 139B 1622 315 990 310 54 116 134 261 92 3892C 554 97 353 109 19 34 50 78 29 1320D 187 27 129 42 10 22 21 30 14 482E 252 40 233 72 10 41 53 118 37 853Total Enrollees 2700 500 1722 538 93 212 257 490 172 6684STFAP Applicants 993 164 714 222 38 97 123 225 80 2654InflowsTuition fees* 32,080,500 6,203,250 19,014,000 3,660,000 642,000 1,306,500 1,569,000 2,964,000 1,048,500 68,487,750Miscellaneous fees 5,400,000 975,000 3,444,000 755,890 130,665 297,860 361,085 688,450 282,080 12,335,030Subtotal 37,480,500 7,178,250 22,458,000 4,415,890 772,665 1,604,360 1,930,085 3,652,450 1,330,580 80,822,780OutflowsStipend Allocation** 3,024,000 474,000 2,790,000 858,000 114,000 492,000 630,000 1,410,000 444,000 10,236,000Net flow 34,456,500 6,704,250 19,668,000 3,557,890 658,665 1,112,360 1,300,085 2,242,450 886,580 70,586,780

Inflow at full-cost tuition + misc fees*** 66,150,000 12,225,000 42,189,000 12,860,890 2,223,165 5,067,860 6,143,585 11,713,450 4,152,080 162,725,030Subsidy from tuition discounts 28,669,500 5,046,750 19,731,000 8,445,000 1,450,500 3,463,500 4,213,500 8,061,000 2,821,500 81,902,250


*Assuming a 15-unit load per student**12,000 each for students in Bracket E***Everyone pays 1,500 per unit plus corresponding miscellaneous fees****Tuition discount + stipend


11

Table 6b: SIMULATION OF ONE-SEMESTER FINANCIAL FLOWS(Using 2004 data for enrolled freshmen)65 percent STFAP application rate

Diliman Manila Los Banos Baguio San Fernando Cebu Tacloban/Palo Iloilo/Miagao Mindanao TotalBracketA 112 28 24 8 1 0 1 5 1 180B 1298 260 770 241 42 87 96 192 68 3054C 720 126 459 141 24 44 64 101 37 1715D 243 35 167 55 13 29 27 39 18 626E 328 51 302 93 12 53 68 153 48 1109Total Enrollees 2700 500 1722 538 93 212 257 490 172 6684STFAP Applicants 1290 213 928 289 49 125 160 293 103 3450InflowsTuition fees* 29,554,650 5,814,225 16,969,200 3,305,400 583,500 1,126,050 1,345,800 2,530,200 898,650 62,127,675Miscellaneous fees 5,400,000 975,000 3,444,000 755,890 130,665 297,860 361,085 688,450 282,080 12,335,030Subtotal 34,954,650 6,789,225 20,413,200 4,061,290 714,165 1,423,910 1,706,885 3,218,650 1,180,730 74,462,705OutflowsStipend Allocation** 3,931,200 616,200 3,627,000 1,115,400 148,200 639,600 819,000 1,833,000 577,200 13,306,800Net flow 31,023,450 6,173,025 16,786,200 2,945,890 565,965 784,310 887,885 1,385,650 603,530 61,155,905



*Assuming a 15-unit load per student**12,000 each for students in Bracket A***Everyone pays 1,500 per unit plus corresponding miscellaneous fees****Tuition discount + stipend


12

Table 6c: SIMULATION OF ONE-SEMESTER FINANCIAL FLOWS(Using 2004 data for enrolled freshmen)80 percent STFAP application rate

Diliman Manila Los Banos Baguio San Fernando Cebu Tacloban/Palo Iloilo/Miagao Mindanao TotalBracketA 138 34 30 10 2 0 1 6 1 222B 974 204 550 172 31 58 59 124 44 2216C 886 155 565 174 30 54 79 124 46 2111D 299 43 206 67 16 35 34 48 22 770E 403 63 372 114 15 66 84 188 59 1365Total Enrollees 2700 500 1722 538 93 212 257 490 172 6684STFAP Applicants 1588 262 1142 355 61 154 197 360 127 4246InflowsTuition fees* 27,028,800 5,425,200 14,924,400 2,950,800 525,000 945,600 1,122,600 2,096,400 748,800 55,767,600Miscellaneous fees 5,400,000 975,000 3,444,000 755,890 130,665 297,860 361,085 688,450 282,080 12,335,030Subtotal 32,428,800 6,400,200 18,368,400 3,706,690 655,665 1,243,460 1,483,685 2,784,850 1,030,880 68,102,630OutflowsStipend Allocation** 4,838,400 758,400 4,464,000 1,372,800 182,400 787,200 1,008,000 2,256,000 710,400 16,377,600Net flow 27,590,400 5,641,800 13,904,400 2,333,890 473,265 456,260 475,685 528,850 320,480 51,725,030



*Assuming a 15-unit load per student**12,000 each for students in Bracket E***Everyone pays 1,500 per unit plus corresponding miscellaneous fees****Tuition subsidy + stipend


13

5. The effective subsidy

The last three rows in Tables 6-6c show the effective subsidy from UP’s socialized tuition fee structure. If tuition is computed at the full cost per credit unit of P1,500 and each student regardless of campus pays this amount plus the applicable miscellaneous fees, total revenue would amount to P162.7 million. As a result of the University’s STFAP, however, inflows range from P68.1 to P85.1 only, effectively imparting a subsidy to those students who are able to enjoy a tuition fee discount. Together with the stipends, the effective subsidy for entering freshmen from STFAP ranges from P85.8-P111.0 million, depending upon the actual coverage of STFAP. The subsidy is of two parts: (i) the differential between actual tuition fees paid and the full-cost tuition fee, which ranges from P78-95 million; and (ii) the stipend for Bracket E students, from P8.2-16.4 million. 6. The proposed procedure

A revision in the STFAP processing will have to be implemented to reflect the modifications made in the bracketing scheme. Because of the anticipated large number of applications and the limited time between application and release of bracketing results, an online STFAP application will have to be deployed, together with the paper-based application currently in place for the numeric scheme. 6.1 Automatic assignment of brackets for non-applicants

UPCAT qualifiers will be required to declare their family gross income when they send their confirmation to enroll in UP. Copies of the immediately preceding year’s Income Tax Returns of the student/parents/legal guardian/spouse must be submitted.

Based on their declared family income, all students with family gross income higher than P1,000,000 will be assigned to Bracket A. Bracket A students will retain their status until they graduate unless they apply for STFAP assistance.

Students with declared family gross income of P1,000,000 or below and who do not apply for the STFAP will be assigned to Bracket B. Bracket B students will retain their status until they graduate unless they apply for STFAP assistance, in which case they may be assigned to any bracket (including Bracket A).

Students who are on government or private scholarships other than STFAP will be assigned to Bracket B for the assessment of fees. 6.2 Applications

Applications for the STFAP will be made available on paper forms as well as online. For online applications, the printed copy of the accomplished form will have to be submitted subsequently, together with the supporting documents.

A modified STFAP form, Form AB-1, will be used for the application (see Appendix B). This form, based on the original application form used in the numerical bracketing system, has been revised to maximize the collection of information for the predictive family income function. The paper forms will be distributed by and submitted to the campus student affairs office.

14

6.3 Bracketing procedure for applicants Step 1: Assign the bracket (C, D, or E) requested by the student in the application as B1. Step 2: Assign a bracket based on the reported income of the student, which is the sum of

father’s income, mother’s income, guardian’s income, spouse’s income, own income, contributions from siblings and relatives, income from property, and income from other sources as B2.

Step 3: Assign a bracket based on the predicted family income using the income function

generated from the latest FIES and LFS as B3. Step 4: Assign a bracket based on certain indicators as B4:

a. School fees paid in fourth year high school if a new freshman, or school fees paid in previous college/university if a transferee, given that the applicant was not a scholar. Assign applicant to the bracket with UP fees in the range of what the applicant paid in fourth year high school or previous university. The bracketing based on previous school fees are as follows: Previous School Fees Paid

Bracket Group I Campus Group II Campus A over 60,000 over 40,000 B 44,001 – 60,000 27,001 – 40,000 C 29,001 – 44,000 20,001 – 27,000 D 18,001 – 29,000 12,001 – 20,000

The basis of the range is what the student will pay in UP under that bracket,

assuming an 18-unit credit load with 3 laboratory units with laboratory fees and full miscellaneous fees.

b. Assign to Bracket A if one or more special indicators are present:

• security guard • swimming pool • international credit card/s • family-financed foreign travel

Step 5: Get the highest among brackets B1, B2, B3, and B4 and assign this bracket to the

applicant. Step 6: Adjust the bracket assigned to the applicant as necessary.

a. Check the bracket against the applicant’s previous year’s bracket, if any. The bracket must not change by more than two levels downward without any special circumstance being present.

b. Cross-check the applicant’s bracket against the brackets of other siblings who submitted STFAP applications and assign the highest bracket among them to all.

15

6.4 Release of Bracket Results

For students who submit their applications before the deadline, the bracketing results will be released:

• Before the regular registration for old students • Before the advance registration for incoming freshmen for the First Semester of each

academic year. For students who submit their applications late: • For incoming freshmen, they may be temporarily assigned to Bracket B. • For old students, they will be assessed based on their previous year’s bracket. These students may be re-assessed for tuition, laboratory, and miscellaneous fees once

their final brackets are determined. 6.5 Appeals

Appeals for review of the brackets and special circumstances will be received for deliberation by the CU committee on scholarships and financial assistance. 7. Timeline for STFAP Application and Release of Results

January Week 1 Release of UPCAT results Week 2 Week 3 Week 4 Confirmation of admission February Week 1 Start of STFAP application: manual and online Week 2 Week 3 Week 4 March Week 1 Week 2 Week 3 Week 4 April Week 1 Week 2 Deadline for filing Income Tax Returns Week 3 Deadline for submission of STFAP applications for brackets to

be released before the registration Week 4 May Week 1 Week 2 Release of STFAP brackets for freshmen Week 3 Advance freshmen registration Week 4 Release of STFAP brackets for late freshman filers

Release of STFAP brackets for old students June Week 1 Regular registration Week 2 Ongoing release of STFAP brackets for late filers Week 3 Week 4

16

8. Additional support for students

The increase in tuition fees may result in some students who will be assigned to brackets A, B, C, or D and may have the capacity to pay but may encounter cash flow problems during registration and the payment of tuition. In addition, there will be students who will submit their applications late and may not get their assigned brackets in time for the payment of fees, thus they may have to pay higher tuition and other fees in advance. To assist these types of students, the University may need to strengthen the Student Loan Board system, and may want to explore the possibility of allowing students to pay their tuition, laboratory, and miscellaneous fees on installment basis. ₪ Committee to Review the Socialized Tuition and Financial Assistance Program (STFAP) Prof. Edgardo G. Atanacio Prof. Emmanuel F. Esguerra Prof. Rene P. Felix November 2006

A-1

Appendix A: Estimating the income function

Because income is only one indicator of socio-economic status, or wealth, it is often used together with other indicators in financial means-testing to signal a family’s (or individual’s) capacity to pay, or eligibility to receive a subsidy. These indicators often include individual or family characteristics closely related to current income, (such as educational attainment, employment status, occupation) and various assets owned (real estate, private vehicles, household appliances) that may serve to substantiate information given about income, or possibly even hint at unreported income.

For the purpose of determining the appropriate bracket of STFAP applicants, an income function is estimated from nationally representative data, NSO’s Family Income and Expenditure Survey (FIES) and Labor Force Survey (LFS). Conducted every three years, the FIES collects detailed information on the income and expenditure patterns of households. The most recent data available is as of 2003. The LFS is a quarterly survey that collects information on the characteristics, and most particularly, the labor market status, of each household member included in the national sample. Since there is a good degree of overlap in the households covered by both surveys, it is possible to match the households in both surveys according to specific variables of interest.

The income function to be estimated is specified as follows:

Yj = βiXij + γiAij + εj , where for the jth family, Y is current income, X is a vector of family characteristics, A is a vector of assets owned, βi and γi are parameters to be estimated, and ε is an error term.

Table A1 lists the variables to be included in the model estimation and their source. They include both numeric and categorical variables. Expenditure on electricity, floor area of house, the quantity of household appliances and motor vehicles owned and region of residence are from the FIES. Household characteristic variables are obtained mainly from the LFS and include number of household members in specific occupational categories, number of household members by educational level completed, number of household helpers employed, and number of OFWs in the household. The model is estimated by ordinary least squares; the results are reported in Table A2.

The results of the estimation shown in Table A2 can then be used to predict the incomes of families of STFAP applicants. To be able to do this, however, it is necessary that the variables from the applicants’ sample be constructed in the same way as those from the FIES and LFS.

Unfortunately, while the STFAP application form asks questions about the occupation of parents and/or spouse, or guardian, siblings, and other household members, these are not currently inputted as part of the database. Instead, only an indicator of whether the parents are employed and the number of siblings that are employed are inputted. Another observation is that the education variable – which has been shown in various studies to have a strong effect on earnings – also lacks the richness it could otherwise have. The current STFAP questionnaire asks questions about the specific level of education and even the degree completed by every household member, but the database has information only on whether the parents, spouse, guardian, non-working siblings finished elementary, high school, or college, but not the actual level completed. The information on educational attainment is not even available for employed siblings. This prevented the better utilization of the national level data for estimating the income function.

A-2

Table A1: Variables from FIES and LFS

Variables Label FIES elec_exp Electricity expenditure flrarea Floor area of house radioqty Radio quantity tvqty TV quantity vtrqty Video players (VHS, VCD, DVD) quantity sterqty Stereo quantity refqty Refrigerator and freezer quantity washqty Washing machine quantity aircnqty Air conditioner quantity carqty Cars, SUVs, jeeps, AUVs, trucks, pickups quantity phoneqty Landlines, cell phones ovenqty Oven quantity motorqty Motorcycles, tricycles quantity reg1 Region 1 dummy reg2 Region 2 dummy reg3 Region 3 dummy reg41 CALABARZON region dummy reg42 MIMAROPA region dummy reg5 Region 5 dummy reg6 Region 6 dummy reg7 Region 7 dummy reg8 Region 8 dummy reg9 Region 9 dummy reg10 Region 10 dummy reg11 Region 11 dummy reg12 Region 12 dummy regcar CAR region dummy armm ARMM region dummy caraga CARAGA region dummy LFS hhelp_n Number of household help

manager_n Number of household members employed as officials of the government and special

interest organizations, corporate executives, managers, managing proprietors, and supervisors

prof_n Number of household members employed as professionals tech_n Number of household members employed as technicians and associate professionals clerk_n Number of household members employed as clerks

service_n Number of household members employed as service workers and shop and market sales workers

othemp_n Number of household members employed in other occupations hsunder_n Number of household members over 22 years of age who are high school undergraduates

hsgrad_n Number of household members over 22 years of age who are exactly high school graduates

collunder_n Number of household members over 22 years of age who are high school undergraduates collgrad_n Number of household members over 22 years of age who are at least college graduates OFW_n Number of household members who are overseas workers

A-3

Table A2: Estimation results for income function

Linear regression Number of observations = 41958 F(41, 41916) = 1990.46 Prob > F = 0.0000 R-squared = 0.7343 Root MSE = 0.43533 ------------------------------------------------------------------------------ | Robust lntotin | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- lnelec_exp | .0530988 .0010509 50.53 0.000 .0510391 .0551586 flrarea | .0007265 .0001212 5.99 0.000 .0004889 .000964 radioqty | .030108 .0046131 6.53 0.000 .0210662 .0391498 tvqty | .0877869 .00635 13.82 0.000 .0753406 .1002331 vtrqty | .0948386 .0059389 15.97 0.000 .0831982 .1064789 sterqty | .0722304 .0061991 11.65 0.000 .06008 .0843808 refqty | .1552188 .0067309 23.06 0.000 .1420261 .1684115 washqty | .1302926 .0067929 19.18 0.000 .1169783 .1436069 aircnqty | .0752214 .0117147 6.42 0.000 .0522603 .0981825 carqty | .1058442 .0119586 8.85 0.000 .0824051 .1292833 phoneqty | .0942792 .0037936 24.85 0.000 .0868437 .1017146 ovenqty | .0909488 .0135307 6.72 0.000 .0644283 .1174692 motorqty | .1206098 .0093065 12.96 0.000 .1023687 .1388508 hhelp_n | .1704982 .0136512 12.49 0.000 .1437415 .1972548 manager_n | .117789 .0055179 21.35 0.000 .1069737 .1286043 prof_n | .2557909 .0106584 24.00 0.000 .2349002 .2766816 tech_n | .121713 .0103151 11.80 0.000 .1014952 .1419309 clerk_n | .1340631 .0083312 16.09 0.000 .1177337 .1503925 service_n | .1219464 .0050618 24.09 0.000 .1120252 .1318677 othemp_n | .0707188 .0022377 31.60 0.000 .0663328 .0751048 hsunder_n | .0720605 .0039302 18.34 0.000 .0643573 .0797638 hsgrad_n | .0731683 .0031691 23.09 0.000 .0669569 .0793797 collunder_n | .1058677 .0043011 24.61 0.000 .0974375 .114298 collgrad_n | .16068 .0054918 29.26 0.000 .1499159 .171444 OFW_n | .1278253 .0105462 12.12 0.000 .1071547 .148496 reg1 | -.3517675 .0118909 -29.58 0.000 -.3750739 -.3284612 reg2 | -.2835311 .0123803 -22.90 0.000 -.3077968 -.2592654 reg3 | -.2064131 .0098435 -20.97 0.000 -.2257066 -.1871196 reg41 | -.1658112 .0094874 -17.48 0.000 -.1844067 -.1472156 reg42 | -.3128376 .0127391 -24.56 0.000 -.3378065 -.2878686 reg5 | -.3757684 .0116939 -32.13 0.000 -.3986887 -.3528482 reg6 | -.3702071 .0108841 -34.01 0.000 -.3915401 -.3488741 reg7 | -.3717704 .0121378 -30.63 0.000 -.3955608 -.3479801 reg8 | -.3793545 .0128961 -29.42 0.000 -.4046312 -.3540778 reg9 | -.5523127 .0149509 -36.94 0.000 -.5816168 -.5230086 reg10 | -.4967099 .0130052 -38.19 0.000 -.5222003 -.4712194 reg11 | -.3701622 .0119911 -30.87 0.000 -.393665 -.3466594 reg12 | -.3509903 .0124579 -28.17 0.000 -.3754081 -.3265726 regcar | -.1453941 .0145058 -10.02 0.000 -.1738258 -.1169623 armm | -.1872757 .014281 -13.11 0.000 -.2152668 -.1592846 caraga | -.4991001 .0128257 -38.91 0.000 -.5242388 -.4739615 _cons | 10.78156 .0105473 1022.21 0.000 10.76088 10.80223 ------------------------------------------------------------------------------

In view of the present limitation of the STFAP database, a “limited” income function including only FIES and LFS variables coinciding with what is available from STFAP is estimated for illustrative purposes. These variables are shown in Table A3. The results of estimating the income function are shown in Table A4.

A-4

Table A3: Variables taken from STFAP data, FIES, and LFS

Table A4: Estimation results for limited income function Linear regression Number of observations = 41958 F( 17, 41940) = 4426.51 Prob > F = 0.0000 R-squared = 0.6948 Root MSE = 0.46648 ------------------------------------------------------------------------------ | Robust lntotin | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- lnelec_exp | .0693656 .0010708 64.78 0.000 .0672667 .0714644 flrarea | .0007076 .0001086 6.51 0.000 .0004947 .0009205 radioqty | .0367332 .0048467 7.58 0.000 .0272336 .0462328 tvqty | .1100897 .0065696 16.76 0.000 .0972131 .1229663 vtrqty | .0997728 .0063218 15.78 0.000 .0873819 .1121637 sterqty | .0679631 .0064786 10.49 0.000 .0552648 .0806613 refqty | .1602487 .0070095 22.86 0.000 .1465099 .1739875 washqty | .2087948 .0070112 29.78 0.000 .1950527 .2225369 aircnqty | .0891225 .0113243 7.87 0.000 .0669267 .1113184 carqty | .1013255 .0116531 8.70 0.000 .0784852 .1241659 phoneqty | .1531661 .0036251 42.25 0.000 .1460607 .1602714 ovenqty | .1063059 .0136133 7.81 0.000 .0796236 .1329883 motorqty | .0409262 .009308 4.40 0.000 .0226823 .0591702 college_n | .1779755 .0045429 39.18 0.000 .1690713 .1868797 highsch_n | .0747693 .0034465 21.69 0.000 .068014 .0815246 hhelp_n | .1539763 .0139639 11.03 0.000 .1266069 .1813458 employed_n | .0919277 .0022817 40.29 0.000 .0874554 .0963999 _cons | 10.36797 .0081945 1265.23 0.000 10.35191 10.38403 ------------------------------------------------------------------------------

Using the estimated parameters in Table A4 with data from actual STFAP applications yields predicted family incomes for STFAP applicants, which can provide a basis for bracket assignment. These are shown in the tables below for freshmen applicants in 2003-2006.

FIES/LFS VARIABLES STFAP VARIABLE Label

FIES elec_exp V186 Electricity expenditure

flrarea V183 Floor area of house

radioqty V152 Radio quantity

tvqty V157, V158 TV (BW & colored) quantity

vtrqty V159,V161Video players (VHS, Betamax, VCD, DVD)quantity

sterqty V153,V154,V155 Stereo quantity

refqty V165,V166 Refrigerator and Freezer quantity

washqty V168 Washing machine quantity

aircnqty V171 Aircon quantity

carqty V198,V202,V206,V210,V214,V218,V222Cars, Pajeros, Jeeps, AUVs, Trucks, Pickups quantity

phoneqty V190,V174,V177 Landlines, cordless phones, cell phones

ovenqty V164 Microwave oven quantity

motorqty V226,V230 Motorcycles, Tricycles quantity

LFShhelp_n V149 No. of household help

college_nV075,V078,V079,V080,V083,V084,V085,V088,V089,V090,V093,V094

No. who reached at least college among father, mother, and/or spouse, guardian who are alive and not living abroad

highsch_nV075,V078,V079,V080,V083,V084,V085,V088,V089,V090,V093,V094

No. who reached at least HS (but not college) among father, mother, and/or spouse, guardian who are alive and not living abroad

employed_nV060,V076,V079,V081,V083,V084,V086,V088,V089

No. of employed among father, mother, spouse, guardian, siblings, and self

A-5

2006 STFAP Data Freshmen assignment based on STFAP applicants data, 2006 Based on Bracket Reported

incomePredicted

incomeMax (reported,

predicted, et al.) A 0 0 2 B 0 21 23 C 226 636 661 D 195 294 285 E 701 171 151

Total 1,122 1,122 1,122 2005 STFAP Data Freshmen assignment based on STFAP applicants data, 2005 Based on Bracket Reported

incomePredicted



Total 1,564 1,564 1,564 2004 STFAP Data Freshmen assignment based on STFAP applicants data, 2004 Based on Bracket Reported

incomePredicted



Total 1,592 1,592 1,592

A-6

2003 STFAP Data Freshmen assignment based on STFAP applicants data, 2003 Based on Bracket Reported

incomePredicted


predicted, et al.) A 0 0 2 B 5 29 33 C 336 873 925 D 290 493 458 E 1,056 292 269

Total 1,687 1,687 1,687

The column “reported income” pertains to brackets based on the applicants’ declared income coming from all sources (B2). The column “predicted income” shows the resulting bracket assignment based on estimating the income function (B3). The third column is the result of using additional information supplied by the applicant indicative of socio-economic status but not normally captured in the FIES or the LFS (B4). For the related discussion, see section 3.2 of main report.

The resulting figures, of course, would be different had it been possible to include more variables in the income function estimation. This concern will be addressed in the fine-tuning of the STFAP application form.

B-1

Appendix B: The proposed application form

University of the Philippines

Application for Financial Assistance Under the Socialized Tuition and Financial Assistance Program (STFAP)

Alphabetic Bracketing Scheme UP STFAP Form AB-1 Version 1.00 11/06

This form may not be sold. It may be photocopied or downloaded from the U.P. STFAP website: http://up.edu.ph/stfap/.

To qualify for financial assistance, the student must: 1. Be a Filipino citizen. 2. Be a bona fide undergraduate student. Except for Law or Medicine, the applicant must

not have a bachelor’s degree. For an incoming freshman or new student, the applicant must have a U.P. Admission Slip.

3. Never have been adjudged guilty of any offense that carries a penalty of more than thirty- (30) days suspension.

4. Be in need of financial assistance as determined by the University. Important Notes 1. The grant shall be for one academic year, renewable annually. 2. The University reserves the right to determine whether the student deserves financial

assistance, and the kind and amount of assistance. 3. STFAP privileges will be withdrawn from a student who withholds and/or falsifies

information, without prejudice to other penalties that may be imposed by the University. Some students have already been expelled or suspended from the University for withholding and/or falsifying information in their STFAP application.

4. All information supplied by the student will be treated with strict confidentiality and will be for the internal use only by the University.

Important: Please submit the accomplished application form with supporting documents to your campus student affairs office on or before: ________________________

B-2

Part A. Instructions and Checklist Instructions 1. This application form must be filled out by the student and the parent/legal guardian/

spouse. 2. Print all entries legibly. Place a check mark or a cross inside the box of the appropriate

response. 3. Avoid erasures. For each erasure, the applicant must countersign the item corrected on

the page margin. 4. Answer all questions and fill up all items. If the question requires a numerical response

and the answer is None, write 0. When the question is not applicable to your situation, write NA. Do not leave any item blank.

5. Attach photocopies of the documents/materials in the following checklist to your accomplished application form. Present the originals of the documents for verification when you submit your application. Non-submission of applicable documents/materials may be considered withholding of information.

6. Submit the accomplished application to the designated student affairs office of your constituent university/campus on or before the deadline.

Checklist of Required Documents/Materials

1. One (1) 2” × 2” picture taken within the last three months, with the applicant’s name and student number printed on the back, stapled on Page 3 of this form.

2. Income Tax Return of the applicant for the previous year, if employed. 3. Income Tax Returns of the applicant’s parents/legal guardian/spouse for the previous

year. If unemployed or exempt, submit the BIR Certification of Exemption from non-filing of ITR or Municipal Certification of Unemployment.

4. Income Tax Returns of other gainfully employed members of the applicant’s household for the previous year.

5. Affidavit of support from legal guardian, if applicable. 6. Marriage certificate if the applicant is married. 7. Personal Statement of Assets and Liabilities of the applicant’s parent/legal guardian/

spouse. Use Page 12 of this application form. 8. Latest Tax Declarations of all real properties. 9. Assessment form or statement of account or certification from high school regarding

the amount of school fees paid by the applicant for fourth year high school (for private high schools only).

10. Assessment form or statement of account or certification from college/university regarding the amount of school fees paid by the applicant prior to entering U.P. (for transferees only).

11. Last month’s electric bill. 12. Last month’s water bill.

B-3

STFAP Application No.: ______ Academic Year 20__-20__ Part B. Application Form 1. Student Data

1.1. U.P. Student Number: 20__-_____ 1.2. Student’s Name:

Family Name: _________________________ First Name: ________________________________________ Middle Name: _______________________ Maiden Name? No Yes

1.3. Date of Birth: Month: ___ Day: ___ Year: ___ 1.4. Sex: Male Female 1.5. Citizenship: Filipino Other, please specify: __________________ 1.6. Civil Status: Single Married Separated/Divorced Widowed 1.7. Address of Student While at U.P.:

Street Address: _______________________________________ Barangay: ________________________________________ City/Municipality: ________________________________________ Province: ________________________________________ Zip Code: ____

1.8. Student’s Telephone Number:

Landline: _______________ Cell phone: _______________

1.9. Student’s e-mail Address: ______________________________ 1.10. Address of Parent/Legal Guardian/Spouse:


1.11. Telephone Number of Parent/Legal Guardian/Spouse:

Landline: _______________ Cell phone: _______________

1.12. Student’s Permanent Address: (if different address from 1.7 or 1.10)


2” × 2” Picture

Print name and student number on the back and

staple here

STFAP Use Only: CU/Campus: ________ Date Received: ___________________ Received by: ___________________

B-4

1.13. Type of financial assistance applied for: Bracket C: 40% tuition subsidy Bracket D: 70% tuition subsidy Bracket E: 100% tuition subsidy, 100% miscellaneous and laboratory fees

subsidy, semestral stipend 1.14. High School Data:

Name of high school: ___________________________________________ Address: _______________________________________________________ Type of high school:

Public general U.P.-administered Public special (science high school) Other state university high school Public vocational Private sectarian Public barrio/barangay Private non-sectarian

Tuition and other school fees paid in fourth year high school: P__________ Were you on scholarship in high school? No Yes

1.15. Are you a transferee from a non-U.P. school?

No Yes

How much did you pay as school fees in your last semester/trimester/quarter in your previous school? P__________

Were you on scholarship in your previous school? No Yes 1.16. College Data:

U.P. campus: Baguio Manila Cebu Mindanao Diliman San Fernando Iloilo / Miag-ao Tacloban / Palo Los Baños

College: ______________________ Degree Program: ____________________________ What is your student type?

Freshman / Transferee from non-U.P. school Old student, first-time STFAP applicant Old student, previous STFAP applicant (Alphabetic Bracketing Scheme)

What was your previous STFAP bracket? ___ Have you been suspended for at least 30 days anywhere in the U.P. system?

No Yes 1.17. Do you have a brother/stepbrother/sister/stepsister/spouse enrolled in an

undergraduate program anywhere in the U.P. System?

Applying for STFAP this

Year? Name Student Number Campus College Civil

Status Yes No

B-5

1.18. Are you staying in a boarding house or dormitory? No Yes

Are you staying in a U.P. dormitory? No Yes How much is your monthly board? P_______ Monthly lodging? P_______

1.19. How do you travel between U.P. and your current place of residence?

By family/own vehicle By carpool By motorcycle By public transport How much is your transport fare per day? P_______ By bicycle/walking

1.20. Are you currently employed?

No Yes Are you employed: Full time? Part time?

If you worked last year, what was your annual gross income? P__________ 1.21. Who will finance your schooling?

Parents Relatives Self Scholarship other than STFAP, please specify: ______________________

How much do you receive as support per semester? P__________ Educational plan, please specify: ________________________________

How much do you receive as support per semester? P__________ Others, please specify: ________________________________________

How much do you receive as support per semester? P__________ 1.22. Are your parents, legal guardian, or your spouse a member of the following?

No membership in any organization Sports and country club (e.g., Manila Polo Club, Makati Sports Club) Service organization (e.g., Lions Club, Rotary) Professional association (e.g., Integrated Bar of the Philippines, Philippine

Institute of Civil Engineers) Business organization (e.g., Makati Business Club, PCCI) Others, please specify: ______________________

1.23. Have you been issued a passport?

No Yes What is your passport number? ________ Date issued? ________

Have you traveled outside the Philippines within the last five years? No Yes

How many times have you traveled abroad within the last five years? ___ Who financed the trip(s)? Family Others

B-6

2. Family/Household Data Household is defined as all persons living under the same roof and/or sharing food and other expenses. 2.1. Parents/Legal Guardian/Spouse

Still Living? Yes, Living

Abroad? Name Age

Educational Attainment Type (see

code list next page)

School Attended or Graduated

From

Name of Employer

Occupation Group (see


Previous Year’s Gross

Income

Previous Year’s Income Taxes Paid Yes No

No

Father/Stepfather

Mother/Stepmother

Legal Guardian

Spouse

2.2. Other family or household members who are employed or earning.

Currently Living with Your Family?

No, Working Abroad?

Name of Family or Household Member Who Is Employed

Age Relation-

ship to the Applicant

Educational Attainment Type (see code list

next page)

School Attended or Graduated

From

Name of Employer

Occupation Group (see


Previous Year’s Gross

Income

Previous Year’s Income Taxes Paid Yes No

Yes

B-7

2.3. Non-earning brothers/stepbrothers/sisters/stepsisters who are single and living with the family. For married applicants, include children.

Studying? With

Scholarship? Name Age Relationship to the Applicant Yes No

Educational Attainment Type (see

code list below)

School Attended or Graduated From Yes No

Educational Attainment Type Codes: (choose the highest applicable)

G Master’s or doctorate degree holder CG College graduate C Attended college but not graduated HG High school graduate H Attended high school but not graduated EG Elementary school graduate E Attended elementary school but not graduated N Never attended school

Occupation Group Codes: M Government official, corporate executive, manager, managing proprietor, supervisor P Professional: accountant, dentist, doctor, engineer, lawyer, teacher T Technician C Clerk W Sales worker, farmer, forestry worker, fisherman, trade worker, plant and machine operator, assembler, laborer, unskilled worker O Other occupation U Unemployed

2.4. Other relatives or people who contribute in meeting the family expenses.

Name Relationship to the Applicant Type of Contribution Average Monthly Contribution

B-8

2.5. What are the sources of income of your household? (select all that apply) Business Remittances from abroad Practice of profession Commissions Farms/haciendas/fishponds Earnings from investments Real estate rentals Pensions Salaries or wages Others

2.6. How many of the following are living with or working full-time for your family?

Number Housemaid ___ Houseboy ___ Yaya ___ Cook ___ Driver ___ Gardener ___ Security guard ___ Others, please specify: __________________ ___

2.7. Does your family have any of the following?

Number of working units AM/FM Radio ___ Stereo/audio system ___ Karaoke ___ Piano/organ ___ Cell phone ___ Television set ___ Video player (e.g., VHS player, VCD/DVD player) ___ Video camcorder ___ Wood/charcoal/kerosene stove ___ LPG stove ___ Electric stove ___ LPG cooking range with oven ___ Electric cooking range with oven ___ Microwave oven ___ Refrigerator ___ Upright or chest-type freezer ___ Washing machine ___ Heated electric clothes dryer ___ Air conditioner ___ Electric water pump and tank ___ Electric water heater ___ Desktop personal computer ___ Notebook/laptop personal computer ___ Computer game system (e.g., Sony PlayStation) ___

B-9

2.8. Do you have telephone landlines? No Yes How many landlines? ___

Do you have electricity?

No Yes How much was last month’s bill? P________ (attach copy of bill)

Do you have piped or running water inside the house?

No Yes How much was last month’s bill? P________ (attach copy of bill)

Do you have a cable or satellite television subscription? No Yes Do you have an Internet service subscription? No Yes

2.9 What is the classification of the house your family is staying in?

Owned, not mortgaged Owned, mortgaged Monthly amortization: P________ Rented Monthly rental: P________ Rent free / Living with relatives Others, please specify: ______________________

2.10. What is the approximate floor area (in square meters) of the house your family is

staying in? ________ sq. m How many bedrooms do you have? ___ How many toilets and bathrooms do you have? ___ Do you have water-sealed toilets? No Yes Do you have a swimming pool? No Yes

2.11. Which of the following are owned by your family?

How many? Year and Model Sports utility vehicle (e.g., Honda CR-V) ___ ________________________ Car or van ___ ________________________ Asian utility vehicle (e.g., Toyota Revo) ___ ________________________ Pickup truck (e.g., Mitsubishi Strada) ___ ________________________ Owner-type jeep ___ ________________________ Truck ___ ________________________ Passenger jeepney ___ ________________________ Motorcycle ___ ________________________ Tricycle ___ ________________________

2.12. Does your father/stepfather/mother/stepmother/legal guardian/spouse have credit

card(s)? No Yes

What type of credit card? International (e.g., American Express) Local (e.g., BPI Express Credit)

B-10

2.13. What real estate properties are owned by, or registered in the name of, your family? Residential Lots Area (in sq. m) Location (Municipality/City, Province) Market Value ____________ _________________________________ P____________ ____________ _________________________________ P____________ ____________ _________________________________ P____________ Do you earn income from these residential lots?

No Yes How much per month? P________

Non-Residential Lots / Agricultural Lands Area (in sq. m) Location (Municipality/City, Province) Market Value ____________ _________________________________ P____________ ____________ _________________________________ P____________ ____________ _________________________________ P____________ Do you earn income from these non-residential lots or agricultural lands?

No Yes How much per month? P________

2.14. What buildings and/or houses are owned or rented out to others by your family?

Floor Area Location (Municipality/City, Province) Monthly Rental Market Value (in sq. m) ________ ____________________________ P_________ P__________ ________ ____________________________ P_________ P__________ ________ ____________________________ P_________ P__________ Do you have boarders, lodgers, or bedspacers?

No Yes How much is your total monthly income from boarding, lodging, or

bedspacing? P________ 2.15. Are there special circumstances in your family which may help the University

evaluate your financial need? No Yes

State briefly the circumstances below:

B-11

3. Vicinity Map of the Family Residence Please indicate landmarks in your sketch.

B-12

Personal Statement of Assets and Liabilities of Parents/Legal Guardian/Spouse I, ______________________________________, of legal age, single/married and a resident of _____________________________________________________, hereby state: 1. That my family’s assets and liabilities as of 31 December 20__, are as follows:

(a) Assets

Personal Properties Cost Savings P ________________ Stocks/Investments ________________ Vehicles ________________ Jewelry ________________ Furniture ________________ Appliances ________________ Others ________________

Total Personal Properties P ________________ Real Properties Market Value Residential lands P ________________ Non-residential lands ________________ Residential buildings ________________ Non-residential buildings ________________

Total Real Properties P ________________

Total Assets P ________________

(b) Liabilities P ________________ ________________

Total Liabilities P ________________

(c) Net Worth (a) – (b)

Total Assets less Total Liabilities P ________________

2. That this personal statement is made to support the application for financial assistance under the STFAP of _______________________________________.(name of student). Date: ____________ ______________________________________ Printed Name of Parent/Legal Guardian/Spouse ______________________________________

Signature of Parent/Legal Guardian/Spouse

B-13

Part C. Statements 1. Statement of the Applicant

I hereby certify, upon my honor, that all the data and information that I have furnished are accurate and complete. I understand that any misinformation and/or withholding of information will automatically disqualify me from receiving any financial assistance or subsidy and may serve as grounds for my expulsion or disciplinary action from the University. In addition, if such misinformation and/or withholding of information on my part is discovered after I have been awarded the financial assistance or subsidy, I will be required to reimburse all the financial benefits received plus interest at the legal rate prevailing at the time of reimbursement without prejudice to the filing of charges against me. Moreover, I authorize the University to conduct a bank credit investigation and send a fact-finding team to visit my home/residence to verify the veracity and accuracy of the information provided in this application or to obtain additional information on my capacity to pay and I will give my utmost cooperation in this regard. I understand that my refusal to comply with any of the above-mentioned conditions may mean suspension or withdrawal of STFAP benefits and privileges. Date: ____________ __________________________ Signature of Applicant

2. Statement of the Applicant’s Parent/Legal Guardian/Spouse I hereby certify that I have read the entire application form and that I certify to the truthfulness and completeness of the information that my son/daughter/dependent/ spouse has furnished in this application together with all the documents attached. I understand that any misinformation and/or withholding of information will automatically disqualify him/her from receiving any financial assistance or subsidy and may serve as grounds for his/her expulsion or disciplinary action from the University. I further recognize that in signing this application form, I share with my son/daughter/dependent/ spouse the responsibility for the truthfulness, accuracy, and completeness of the information supplied herein. Moreover, I authorize the University to conduct a bank credit investigation and send a fact-finding team to visit my home/residence to verify the veracity and accuracy of the information provided in this application and I will give my utmost cooperation in this regard. I understand that my refusal to comply with any of the above-mentioned conditions may mean suspension or withdrawal of STFAP benefits and privileges of my son/daughter/dependent/spouse. Date: ____________ ______________________________________ Printed Name of Parent/Legal Guardian/Spouse ______________________________________

Signature of Parent/Legal Guardian/Spouse

B-14

Acknowledgment REPUBLIC OF THE PHILIPPINES ) S.S. ) BEFORE ME, a Notary Public for and in the above jurisdiction, this _____ day of ______________, 20__, personally appeared ____________________________________ (name of parent/legal guardian/spouse) with Community Tax Certificate No. ___________ issued at ______________________ on ____________________, and _______________________ (name of student if applicable), with Community Tax Certificate No. ___________ issued at ______________________ on ____________________, known to me to be the same person(s) who executed the foregoing instrument and acknowledged to me that the same is their/his/her true act and deed.

IN WITNESS WHEREOF, I have hereunto set my hand and seal on the date and place herein above stated.

NOTARY PUBLIC Until December 31, 20__

Doc. No. _______ Page No. _______ Book No. _______ Series of 20__.

C-1

Appendix C: Comparison of Alphabetic and Numeric Bracketing Schemes UP Diliman, UP Manila

Alphabetic Bracketing Scheme Numeric Bracketing Scheme Bracket Income Range TF/U1 M & LF2 Benefits3 Bracket Income Range TF/U M & LF Benefits

A More than 1,000,000 P1,500 Full None B 500,001 – 1,000,000 P1,000 Full None 9 More than 250,000 P300 Full None

8 210,001 – 250,000 P225 Full None 7 170,001 – 210,000 P150 Full None C 135,001 – 500,000 P600 Full None

6 130,001 – 170,000 P75 Full None D 80,001 – 135,000 P300 Full None 5 80,001 – 130,000 0 Full None

4 65,001 – 80,000 0 0 P2,500 3 55,001 – 65,000 0 0 P4,250 2 45,001 – 55,000 0 0 P5,500 E 0 – 80,000 0 0 P12,000

1 0 – 45,000 0 0 P6,750 1 Tuition fee per unit 2 Miscellaneous and laboratory fees 3 Semestral benefits, for the numeric bracketing scheme, consists of living allowance and book allowance UP Los Baños

Alphabetic Bracketing Scheme Numeric Bracketing Scheme Bracket Income Range TF/U M & LF Benefits Bracket Income Range TF/U M & LF Benefits

A More than 1,000,000 P1,500 Full None B 500,001 – 1,000,000 P1,000 Full None 9 More than 225,000 P250 Full None

8 189,001 – 225,000 P187.50 Full None 7 153,001 – 189,000 P125 Full None C 135,001 – 500,000 P600 Full None

6 117,001 – 153,000 P62.50 Full None D 80,001 – 135,000 P300 Full None 5 72,001 – 117,000 0 Full None

4 58,501 – 72,000 0 0 P2,500 3 49,501 – 58,500 0 0 P4,250 2 40,501 – 49,500 0 0 P5,500 E 0 – 80,000 0 0 P12,000

1 0 – 40,500 0 0 P6,750

C-2

UP Baguio, UP Mindanao, UP San Fernando, UP Visayas

Alphabetic Bracketing Scheme Numeric Bracketing Scheme Bracket Income Range TF/U M & LF Benefits Bracket Income Range TF/U M & LF Benefits

A More than 1,000,000 P1,000 Full None B 500,001 – 1,000,000 P600 Full None 9 More than 225,000 P200 Full None

8 189,001 – 225,000 P150 Full None 7 153,001 – 189,000 P100 Full None C 135,001 – 500,000 P400 Full None

6 117,001 – 153,000 P50 Full None D 80,001 – 135,000 P200 Full None 5 72,001 – 117,000 0 Full None

4 58,501 – 72,000 0 0 P2,500 3 49,501 – 58,500 0 0 P4,250 2 40,501 – 49,500 0 0 P5,500 E 0 – 80,000 0 0 P12,000

1 0 – 40,500 0 0 P6,750

2006 - Tuition Fee Report - Atanacio et al.pdf

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