Judging by the phone calls the Undergraduate Student Government has been getting, there is a great deal of confusion about the student aid program that USG and central administration have agreed upon.

Each year, when tuition is raised, there is a certain amount of revenue this increase generates. USG submitted a sample proposal to central administration in which we assumed a 4.5 percent tuition increase. This would bring in approximately $11 million in additional tuition revenue. In our agreement, 3 percent of this $11 million will now be automatically allocated to the Office of Student Aid. Thus, per our proposal, the student aid allocation would be about $330,000 for Fiscal Year (FY) 1994-95. Basically, student financial aid is now "pegged" to tuition increases, or increases as tuition increases.

But the beauty of this program is that it is not a one-time allocation. As tuition and enrollment increases, the amount of money given to student aid increases. Specifically, every time tuition increases by 1 percent, student aid will increase by approximately $73,000.

This will be done each year, so the annual allocation will build upon itself. In FY 1995-96, again assuming a 4.5 percent tuition increase, student aid allocation should be $660,000.

Note that this is an increase to current student aid funding, and as the years go by, it will increase accordingly. Using today's enrollment and tuition levels, in FY 1996-97, the allocation should be more than $990,000. In 10 years, it should be more than $3,300,000. In addition, this program satisfies one of USG's main concerns: Increasing student aid at a negligible expense to students.

There are two basic purposes of this program. One, there will be a large annual increase in student aid to help needy students. The value of this is obvious. Two, as the cost of a Penn State education increases, fewer people will be able to afford to come here. But if available aid increases at the same rate, the burden of increased tuition will have less of an effect. Students who could not afford higher tuition rates will now be able to afford a Penn State education.

As of now, this additional funding will go to help the "neediest" students. Thus, the student aid will be distributed based on financial need. As for the distribution of future allocations, criteria for qualification for this aid will be determined by the Office of Student Aid. If you want to influence the criteria, call the Office of Student Aid and let them know how you feel.

I hope this clears up the situation for everyone. By increasing the pool of available student aid, the administration and USG hope to make a Penn State education possible for as many qualified as possible. We hope that it will make the lives of existing students a little easier as well.