Lt. Gov. Dan Patrick has pledged to pursue legislation that will end tuition “set-asides” and lower tuition at state universities across the board.
Patrick called the set-asides “nothing more than a hidden tax,” claiming that the middle class bears the brunt of the cost.
“Set-asides” is the umbrella term used for funds collected by colleges under HB 3015. In 2003, college tuition rates were deregulated, meaning that institutions could raise tuition as much as they needed to in order to pay for campus, faculty, and student living needs. In return, public colleges and universities are required to set aside a percentage of their tuition costs to use as grants for students with demonstrated financial need. The breakdown is somewhat complicated, but the net effect is that public colleges set aside around 15-20% of tuition or grants for low-income students.
In 2009, the Legislature passed a bill requiring state schools to inform students how their tuition dollars were being used. A group of college students was “shocked” to learn where their tuition was going and formed Stop Texas Set Asides.
Patrick has proposed a 1-to-1 ratio of cuts to savings: for every dollar cut in set-asides, a dollar would be taken off tuition.
Not necessarily, experts say.
In a presentation on the rising cost of college, Center for Public Policy Priorities Analyst Garrett Groves argued that Patrick’s promise of a 20% reduction rate is overestimated. Because of the way tuition is collected and grants are made, Groves projected closer to 7% savings.
He also said that the students who benefit most from those set-asides – namely those from low-income families – will be hit the hardest.
The Dallas Morning News reported that some students could be prevented from attending college altogether.
While 7% savings might be nice for middle income families – indeed every dollar helps – it probably won’t determine whether a student can or cannot attend college. Rather, it would save the average scholar (or their parents) $600-$700 per year on tuition.
For students from low-income families, grants are critical. The UT-Austin alumni organization Texas Exes reported that $22 million in set-aside funded grants were spread across 9,878 students in the 2013-14 school year. That averages to $2,227 per student, but because grants are need-based, it is plausible to assume some awards were bigger than others.
While Patrick and others have said that the State will fill in the aid gaps that would be created, they have not said how.
On Sept.1, 2016, the editorial board of the Denton Record-Chronicle also wrote in favor of ending set-asides and called on the State to foot the bill.
“Middle class families should not be subject to what amounts to a hidden tax to subsidize college costs for other Texas families. It could be seen as state government’s attempt to extort a charitable contribution from them,” the editorial reads. “The Texas Legislature should increase funding for higher education and make sure that it provides low-income students with aid and grant packages similar to the popular Pell grant program at the federal level.”
In a state like Texas, the danger is that once funds are gone, they are gone. Lawmakers in recent sessions have showed little willingness to spend budget surpluses when they have them, and all signs point to a tighter year in 2017. Experts expect to hear a lot of “sorry, no money” from the State in spite of its $10 billion rainy day fund – the largest in the country.
There is no doubt that the rising cost of college is an incredible burden to families. There is also no doubt that student debt is choking young professionals even as they move into middle age. The cost of college is a worthwhile problem to solve, according to policy makers, advocates, and analysts on both sides of the aisle.
Those in favor of keeping set-asides and other state and federal aid argue that this must be balanced in a way that does not diminish critical grant programs aimed at equitable access to education.
Tom Melecki, former director of financial services at the University of Texas at Austin, put it this way: “If you want to ensure that only wealthy students and upper middle-class students can afford to go to Texas public colleges and universities in the future, do away with tuition set-asides.”