The state Board of Regents approved a new program to replace tuition set-asides at regent universities at their Thursday meeting.

The tuition set-aside program takes tuition revenue paid to the universities and redistributes it in the form of scholarships.

To replace the money generated by tuition set-asides, regents are requesting $39.5 million in state appropriations, and now they are also asking for the regent universities’ fundraising arms to raise $200 million for merit scholarships.

“That’s the need and we’ve encouraged them to set that as their target goal,” Regent President pro-tem Bruce Rastetter said.

By raising $200 million, the three regent university foundations would step in to aid students receiving tuition set-aside dollars.

Iowa currently does not have a dedicated merit-based program for students attending public universities, which originally warranted the tuition set-aside program’s start, but Regent President Craig Lang wants to rid the universities of the tuition set-aside stigma. The program was highly criticized as of late.

“We really want to eliminate the language ‘tuition set-aside,’ ” he said. “It’s confusing and it gives people the wrong idea.”

The $200 million target is the amount it would take for the regent universities to provide the needed merit-based scholarships. Iowa State University is asked to raise $85.7 million, the University of Northern Iowa is asked to raise $58 million, and the UI would raise $56.6 million.

While regent officials are confident in the foundations’ fundraising abilities, Regent Bob Downer expressed concern UNI’s $58 million fundraising goal.

“I think it’s very important to have realistic numbers for those targets,” he said. “I have no reason to doubt the UI or ISU numbers, but I have some serious concerns about the target for UNI.”

The committee plans to request $39.5 million of state appropriations based on expenditures they’ve had so far.

“It’s not new state money,” Rastetter said. “It’s doing away with the tuition set-aside, so if you think about it, it actually makes tuition more affordable for all Iowa students.”’

If the $39.5 million appropriation passes through the state legislature, tuition set-aside will cease immediately for the 2013-2014 academic year.

UI President Sally Mason has taken her own pledge to raise money for merit-based scholarships, creating The Golden Pledge, where she will take unrestricted funds to match endowments of more than $100,000, in turn drastically adding to the UI foundation.

“I’m taking unrestricted monies to leverage donor dollars and grow the scholarship fund for Iowa kids even larger,” Mason said.