Associated Students hosted a student forum yesterday at the Pardall Center to discuss the Financial Aid Office’s recent proposal to reduce financial aid grants for students who waive out of Gaucho Health Insurance (GHI).
After an initial plan was proposed at the beginning of winter quarter, in which financial aid would be reduced for students that waive GHI, A.S. met with the Financial Aid Office and agreed on a revised proposal which would provide health insurance industry standard compensation for student waivers determined through surveying students. Hosted by A.S. President Ali Guthy and A.S. Internal Vice President Angela Lau, the forum informed students about and addressed questions regarding the proposed plan.
According to Lau, students who currently receive financial aid are allocated around $2,600 to cover health insurance costs no matter whether or not they waive GHI, which is the reason behind the financial office’s plan to reduce aid.
“Currently, students who have a certain need level all get financial aid for GHI at $2,600. Even though your expenses are less, even if you waive out, you still get that much if you’re the same need level as someone who still participates in Gaucho Health Insurance,” Lau said. “That was the concern that the financial aid office had and that’s why they proposed this new financial aid package.”
Lau said the financial aid office is apprehensive that students will purposely select inadequate health insurances costing significantly less than $2,600 instead of GHI to have excess financial aid money for other non-health purposes.
“Their main concern was that people were getting so much money, this $2,600 for health insurance, but on average outside of UCSB the amount that you have to pay for health insurance is a lot less than that,” Lau said. “Let’s say its $1,500, so now students have an extra $1,000 so to them, it seemed like the $1,000 was enough to entice someone to essentially get a crap health insurance and they didn’t like that.”
According to Guthy, students may still require the excess money to pay for necessities such as rent or food. The financial aid office contends the excess money should be used to provide aid to new students, or to students who previously applied unsuccessfully for aid due to the lack of funds.
“From our perspective, we were saying that while students are using that extra $1,000 for housing, or for textbooks, or for food, they still need that money,” Guthy said. “But the financial aid office’s argument is that well if we take that $1,000 back, so instead of giving you the $2,600 when your health insurance only costs $1,500 we take $1,000 away, we can spend that money to allocate more financial aid to more students.”
Second-year history of public policy major Cassie Mancini said aid money is still necessary to cover additional healthcare costs for those without GHI.
“I would say that even if you are on your parents’ plan that doesn’t mean you don’t have healthcare costs,” Mancini said. “What if you’re on your parents plan and you have to go to the hospital for some reason or you’re on an expensive drug? You’re still paying for healthcare you’re still paying for the price of those drugs or the price of that pay in some way or another.”
According to Guthy, health insurance is required for all students, and the financial aid office’s original proposal would not provide any financial aid money for health insurance unless it is GHI.
“It’s essentially saying, ‘You can either have this health insurance or we’re not going to pay for anything else,’” Guthy said.
Lau said the initial plan would create a health insurance monopoly where students receiving financial aid are essentially forced to choose GHI.
“It almost seemed like they were monopolizing the health insurance market for all students saying, ‘You have to have GHI to get financial aid for it,’” Lau said.
A.S. met with the financial aid office for a revised plan, which will involve surveying students to determine a health insurance industry average that students will be given if they choose to waive GHI, instead of the original proposal which would not allocate any money for health costs, according to Guthy.
“We came up with a preliminary agreement that the financial aid office would pay an industry standard to students who waive out of Gaucho Health Insurance,” Guthy said. “They’re planning to conduct a survey to all students who opt out of Gaucho Health Insurance to see kind of what kinds they have to define what this industry standard is.”
Guthy said students who choose an insurance plan above the surveyed industry standard can still receive financial aid to cover the difference.
“If your health insurance happens to be greater than the industry average but below Gaucho Health Insurance you can still go into the financial aid office and get a grant to cover your health insurance,” Guthy said, “All you need to do is come in with a bill and they’ll pay for it.”
According to Guthy, the financial aid office established the proposal to allocate money more efficiently so that students receive the precise monetary amount they require and no more.
“The kind of motivation behind this is to make the spending of financial aid more efficient,” Guthy said. “They want you to spend the money to the exact level that you need, they don’t want you to have excess. And they’re arguing if we give you more money for health insurance than you need, that’s excess and we don’t want you to have excess.”
Fourth-year psychology major Alex Hill said the financial aid office allocates a certain amount of financial aid specifically for health purposes, and any excess portion of that amount not being used for health is deemed wasteful by the financial aid office.
“You have a lot of students who are either shopping on the market and getting a cheaper plan, or are on their parents plan and ultimately their costs are reduced. Students are having say between $500 and $1,000 per year extra money that is not going to health costs,” Hill said. “According to the financial aid office, based off their breakdown, technically we’re wasting money, so we need to adjust our standards so it’s more strict.”