Tuition set-aside helps keep college affordable for Texans

The Senate Education and Higher Education committees in a joint meeting on March 29, 2015. Photo by Shelby Knowles

Selective memory loss is a common malady in the Texas Capitol. Maybe it’s something in the water.

The most recent bout of amnesia has afflicted some who claim they want to improve college affordability while advocating cuts to a program that, for the past decade, has helped make college affordable for Texas families.

In 2003, the Texas Legislature relinquished control over tuition at Texas universities. The deregulation of tuition eased the pressure on the state budget — making the job of legislators easier — by shifting costs to students and families.

It was expected that tuition would rise as a result of deregulation, and the continuing affordability of higher education weighed heavily on the minds of some legislators. The solution: Mandate that 20 percent of a school’s increase in undergraduate tuition after deregulation go toward student financial assistance. The bill’s author, state Rep. Geanie Morrison, R-Victoria, said at the time that she added what’s known as the “tuition set-aside” to ensure tuition increases wouldn't be "going on the backs of middle-class families."

That financial assistance effort has now come under attack as a “hidden tax” and, according to some characterizations, it’s pushing higher education out of reach for most Texas families. By eliminating the set-aside, critics suggest, tuition could be decreased by at least 20 percent. That’s a false promise, but the politics of the Twitter era mean such promises can often be the end of the story.

Dig a little deeper into the numbers, and a different story emerges. At the University of Texas at Austin, scrapping the tuition set-aside would affect undergraduate students whose families earn less than $120,000. The median family income in Texas — almost $54,000 — is less than half that amount.

Adjusting for inflation, those students are still paying less than $6,000 per year — about the same as in 2003 — even as tuition increased to $9,800 by fall 2015. Tuition set-aside grants played a large part in keeping tuition in check for those families.

And in fact, the average student with a family income of $60,000 or less at UT-Austin is paying no tuition due to scholarships, grants and financial aid from the tuition set-aside. In addition, many of these students may receive additional aid that can be used to cover the cost of housing and books, according to the university.

But wouldn’t everyone’s tuition drop by 20 percent if the set-aside went away? Nope.

Higher education officials estimate that tuition might decrease on average by about 7 percent. That’s because, by statute, the set-aside is calculated not on the total tuition amount but only on the amount that tuition has increased since 2003.

Of course, the Legislature could always step up and provide more state dollars for financial aid to compensate for the loss of the tuition set-aside money. But those in control of the Capitol have been happy to let students and families pick up more and more of the tab for higher education in recent years and contribute less and less state funding. For example, the state’s share of funding to the Texas A&M System has now slipped to just 35 percent, down from almost 60 percent prior to deregulation.

Let’s not forget: Lawmakers created the tuition set-aside to help middle-class families because they were passing the buck for the cost of higher education onto students and families. That truth tends to get lost in today’s Legislature, where it’s never the legislators' fault and there’s always someone else to blame.

Kirk Watson

State senator, D-Austin