Proposal considers lowering financial aid for students who waive Gaucho Health Insurance, replacing it with ‘industry average’ aid

The Financial Aid Office has recently proposed a plan to reduce financial aid benefits to students who waive the Gaucho Health Insurance (GHI) for the 2015-2016 academic year.

Under the proposed plan, students receiving financial aid who waive GHI will receive less money than those who keep university student health insurance and will instead receive aid based on a student survey-based “industry average” determined by the university. UCSB has the most expensive health insurance plan in the UC system at around $2,568 per year ($856 per quarter) for the next academic year, and up to 50 percent of students waive this plan every school year.

GHI Advisory Committee Budget Officer Mike Anderson said the plan exists to better allocate financial aid resources to students in need.

“If a student already has insurance then the financial aid office will take that money and give it to others who are financially struggling,” Anderson said. “They need the GHI Plan and can increase their financial aid package. I tend to believe it would be a benefit especially to those who are staying in the GHI Plan and refocus those funds to those students.”

However, according to A.S. President and fourth-year sociology and psychology double major Ali Guthy, the Financial Aid Board wrongly assumes students receiving financial aid do not need the money given for health insurance.

“If you remove the funding for health insurance because you waived the Gaucho Health Insurance does not mean you have the money for health insurance. You may still need that money to pay for the other health insurance,” Guthy said. “Students who waive out of health insurance are not incurring that cost for health insurance or have a family plan.”

Providing less benefits will provide more incentive for people to get GHI which equals more money for them. But this isn’t really anything new — fucking over the college kids to make more money. Can’t really say that I’m surprised. —Andrew Okeh

A.S. is currently working with the Financial Aid Office to reach an agreement to avoid cutting the financial aid benefits for student health insurance.

First-year computer science major Andrew Okeh said he believes the plan does not benefit students and instead profits the university.

“Since when are less benefits ever good?” Okeh said. “The people who are involved with the board, it’s good for them because providing less benefits will provide more incentive for people to get GHI which equals more money for them. But this isn’t really anything new — fucking over the college kids to make more money. Can’t really say that I’m surprised.”

First-year environmental studies major Navpreet Khabra said she also opposes the proposal because she believes that the aid students receive specifically allocated to health insurance is valuable to students who opt out of GHI.

“By lowering their financial aid award, it could offset the money that they would have saved,” Khabra said. “I personally was able to use the money saved from waiving GHI for other educational expenses such as textbooks and transportation.”

According to Anderson, however, if students waive GHI it implies they have more affordable health insurance plans.

“If people waive out then they have other health insurance, it’s already in the family budget and calculated for,” Anderson said. “Because they have health insurance, they’ll waive out. There’s a large percentage of students who don’t have health insurance like students overseas. It’s something we’re exploring. It may or may not happen.”

According to Guthy, she and the Internal Vice President Angela Lau have reached a compromise with the Financial Aid Board that would allow students to possibly alter their financial aid award under certain financial circumstances.

“Let’s say the industry average is $1,500 and if you pay more than that, you could go to the financial aid office to adjust that,” Guthy said. “We reached a verbal agreement on our meeting on Friday so I’m pretty sure that’s what we’re doing.”

Anderson said the plan will be ultimately beneficial because it will help students who are financially struggling by expanding the available limits on general financial aid funding.

“Financial aid offices run out of money. They give out grants and scholarships and then are left with loans. They could give those grants to those who are having a tougher time and I think that would be a good thing,” Anderson said. “I tend to believe it would be a benefit especially to those who are staying in the GHI Plan and refocus those funds to those students.”

First-year economics and accounting major Paige Donaldson however said the plan is “terrible” because it does not help students save money.

“I waived the health insurance because I couldn’t afford it, so how would cutting my financial aid do any good?” Donaldson said. “Either way it’s a trap to make us pay more and make money off of us, but students are not to be treated like walking money bags to make a profit.”

Having to pay for GHI in order to receive the funds I need just to be able to attend this school is a sure fire way to alienate a large portion of the student body. Low key, fuck GHI. —Willie Roman

Willie Roman, a first-year English and economics double major said he’s surprised the plan is even being considered.

“Personally, as a student from a low income household, my financial aid is absolutely critical, and stretched thin as it is,” Roman said. “Having to pay for GHI in order to receive the funds I need just to be able to attend this school is a sure fire way to alienate a large portion of the student body. Low key, fuck GHI.”

According to Guthy however, the Financial Aid Board has been open to working with the student body to enact reasonable financial aid policy and are hoping students participate in the upcoming surveys.

“Financial Aid Office is sending out a survey to gauge the industry average and collect more data. They won’t erase the funding entirely but will lessen it to the industry average,” Guthy said. “We encourage people to do the survey to give students time to prepare for this change. I think we’ve reached a good conclusion.”

Anderson, said a decision regarding the proposal, whose rising costs are due to the Affordable Health Care Act, will be made in the next few weeks.

“We’re trying to wrap it up here in the next few weeks,” Anderson said. “There used to be caps on the benefits of each person. It’s getting expensive because the Affordable Health Care act put no caps on the benefits.”

A version of this story appeared on page 1 of Thursday, February 12, 2015’s print edition of the Daily Nexus.

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