AMES — The Iowa state Board of Regents plans to request $39.5 million for a new system of financial aid based on students who demonstrate need.

The regents met in Ames Wednesday to discuss the five-year program that would ultimately lower tuition for all in-state undergraduate students. Before the system is implemented, the regents would have to request an appropriation approved by the Iowa Legislature.

Instead of the universities taking the $39.5 million of the tuition set-aside they receive and redistribute in the form of scholarship and aid, the university will lower tuition for the resident undergraduate students if the funding is given for the new program aimed to begin in 2014-15.

“What we want to do is to totally abandon the idea that we’re taking money from tuition and then redistributing it back to students,” said Regent President Craig Lang.

The regents will present the final report of the Student Financial Aid Committee during their next meeting, in October.

This conversation comes on the heels of a controversial discussion of tuition set-aside, where students from middle-class backgrounds furnish the aid in the form of tuition.

The regents voted during the June meeting to end the use of tuition set-aside within the next five years and established the committee to research an alternative to the tuition set-aside program.

This new recommendation would change the highly debated program for all three regent institutions.

This new resolution would cause the state to pick up the tab for what the University of Iowa normally gives students for scholarships, and the aid the UI gives is pulled from tuition from other students.  Instead, the money the UI normally spends on aid would be used to replace the money the UI would lose in the case of tuition freeze.

“It’s not new dollars, it’s replacement dollars,” Regent President Pro Tem Bruce Rastetter said.

In order for the tuition freeze to come through, the Legislature needs to pass the request for a $39.5 million program.

While the $39.5 million won’t be enough to cover all the needs of the public university students, the regents are obligated to give a number for legislators to work with by Oct. 1.

“Our intent is close dollar-to-dollar as possible to reduce the costs of in-state tuition,” Lang said.

While the state provides the nearly $40 million, the universities tuition drops to a lower number and the state provides the 2.6 percent to keep up with the inflation on the scholarships, Rastetter said.

“Our idea was to send a message to the Iowa Legislature to do two things: keep the education to our Iowa students affordable and … we are only requesting an inflationary number, and it’s on the low side of the index,” Lang said.