Tuition continues to increase for colleges and universities statewide as enrollment grows at higher education institutions across Texas. However, colleges are trying to find a balance between tuition costs and quality of education to avoid tuition rates students can no longer afford to pay.

"Our purpose is to serve our students, and if we price ourselves out of that range, we've defeated that purpose," said Cindy Gilliam, vice chancellor of administration and finance for the Lone Star College System.

Although tuition and fees at LSCS have increased 41 percent since 2009, rates are nearly $100 less for students enrolled in 12 semester credit hours than the state average for community colleges, according to the Texas Association of Community Colleges.

The vast majority of the LSCS's tuition spike came during the economic recession, Gilliam said. Before that, she said the college would typically keep tuition flat during years of legislative sessions and then increase rates about $2 per credit hour in off years once the college learned how much state funding it would receive.

Gilliam said an increasing tax base helps LSCS keep its rates low as tuition and property tax revenue each account for about 37-38 percent of the school's total revenue. The remaining 24 percent comes from state funding.

"Our property values per full time equivalent student are higher than the average community colleges," she said. "We have a good tax base and it grows most every year, some even during the economic crash. So we rely on that additional revenue without raising the tax rate."

Tuition rates at community colleges are still substantially less than public universities. Gilliam said one class at LSC can cost a fifth of the cost of the same class at the University of Texas.

Deregulation of universities

David Gardner, deputy commissioner of the Texas Higher Education Coordinating Board, said tuition has increased at public universities about 90 percent since the Texas Legislature voted to deregulate tuition in 2003. According to the House Research Organization, supporters of the legislation—HB 3105—believed tuition deregulation would provide universities flexibility to respond to state funding cuts.

Gardner said several factors have contributed to the increase, including competition for faculty with other states, maintenance of facilities and improved student services.

"I think that the most significant factor is just having to find a way to provide the students the services they need," Gardner said. "We've moved into an era where it's not just students walking into a classroom and walking out."

Texas colleges are still less expensive than their counterparts in many states, Gardner said. However, while Texas ranks 22nd in average tuition at four-year public universities, according to THECB, the state ranked 27th in median household family income from 2010-12, according to the U.S. Census Bureau.

Jolyn Brand, founder of Houston-based Brand College Consulting, said financial aid programs are not keeping up with the rise of tuition costs. Brand said students from low-income families can face as much as $14,000 in tuition costs each year after the financial aid provided by federal Pell Grants are applied to a student's bill.

"The Pell Grant hasn't increased nearly as much as the rate of tuition," Brand said. "Even for really low-income families, the maximum Pell Grant is $6,000 a year. That's not nearly enough to pay for tuition, much less room and board."

With students having to decide between taking out loans to pay for the remainder of their education, she sees more and more students opt for community college the first two years before transferring to a four-year university, a path in which students are less likely to graduate.

"We're getting very close to an area where kids can't afford it, and their parents can't afford it," Brand said.

Legislation

The state is trying to find new ways to make college more affordable, Gardner said. The Texas Legislature passed HB 29 in the last legislative session, requiring higher education institutions other than public state colleges to offer four-year, fixed-rate tuition programs to entering undergraduate students.

The University of Houston will implement its fixed rate tuition plan in the fall with the UH in 4 Initiative. Teri Longacre, vice provost and dean of undergraduate student success, said the plan will allow students who take 25 percent of their degree's required credit hours per year—usually 30 credit hours—to pay a fixed tuition rate if they graduate within four years.

Anticipating a tuition increase of 2.2 percent per year, Longacre said the fixed rate plan could save students money over four years and encourage earlier graduation.

"Each semester beyond four years is costing them additional tuition and housing costs and opportunity costs for not starting out in their career at that point," she said. "Four years gets students into the job market faster or into graduate school faster. And the longer they stay in school, the less likely they are to finish."