Tuition Cap, Ending Set-Asides Won’t Help Students Afford College

The Texas Senate has approved two bills that fail to address the state role in making college affordable for Texas students.

While capping tuition may seem like an easy solution to the rising cost of college tuition in Texas, in reality, this Band-Aid would not address one of the key drivers of rising costs – the fact that state funding for higher education has not kept pace with the rise in student enrollment across the state.

Over the past 15 years a dramatic shift has taken place in terms of who bears the burden of paying for a college degree at four-year public universities in Texas. Since 2000, state general revenue appropriations have decreased nearly 30 percent on a per student basis, effectively forcing students and families to pay an additional $2,246 per year to make up the difference. This means that half of the increases in tuition at public four-year universities since 2000 can be attributed to the state’s failure to maintain adequate funding.

Let’s look at what the Senate did today:

SB 19 provides a partial solution to college affordability that ignores the state role in funding public universities. SB 19 will place a two-year cap on tuition increases and require institutions to improve outcomes for students before they can raise their tuition rates in the future. This is a potentially good idea, except for the fact that it does not require the state to increase or even maintain its own investments in higher education. Instead, the Senate budget is again cutting state funding to universities, putting in jeopardy advances in student graduation rates and putting nearly all of the burden of college affordability on institutions, students and families.

SB 18 removes a key source of financial aid for Texas students, which more than 87,000 students relied on to help pay their tuition and fees in 2015. Known as tuition set asides, these funds were first made available in 2003 when the state deregulated tuition and allowed institutions to raise their tuition rates.  At that time the legislature was concerned that many Texas students would be priced out of college.  In an effort to prevent that from happening, the 2003 legislation required institutions to set aside 15 percent of any new tuition increases beyond the 2003 level to provide grants and scholarships to students with financial need.  SB 18 removes that requirement and allows institutions to do away with these need-based grants and scholarships.  Unfortunately, there has been little indication from institutions that they would reduce their tuition rates in response to this legislation, creating the likely scenario that the only students impacted by this legislation will be those who lose grant funding.

To move forward effectively we need to both reduce the cost of going to college in Texas and ensure that more students graduate with a degree year after year.  That is why implementing some form of performance funding, similar to SB 19, can be a good option for Texas.  But that particular solution currently gives the legislature a free pass on not providing sufficient funding to Texas universities.  And a free pass is not what the students of Texas need or deserve.
Texas’ Support for College is Not Keeping Pace With Enrollment
The number of students enrolled at public four-year universities in Texas increased significantly between 2000 and 2016, despite declining state support.

  • Enrollment has increased by 48 percent since 2000

From 350,014 full-time student equivalents in 2000 to 519,188 in 2016.

  • State general revenue support per student has decreased by 32 percent since 2000

From $7,767 per student in 2000 to $5,521 in 2016, a decline of $2,516 per student after adjusting for inflation.

Notes: Student Enrollment and State Appropriations per student for all Texas Academic Institutions in 2016 Dollars. The general revenue reported included here are the amounts reported as State Appropriations in the Sources and Uses Report and does not include State Grants and Contracts, Research Development Funds, and Constitutional Funds received by the institutions.

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