As the end of the school year approaches, many parents and high school  seniors are counting their college savings in Texas, where tuition at public universities has risen 6 percent per year on average, according to the Texas Higher Education Coordinating Board.

In an attempt to slow down the rapid rise in tuition, legislators have filed dozens of bills this session in the Texas Senate and House to regulate tuition. At the same time, universities could face a six to 10 percent slash in their state funding.

While proponents of Senate bills 18 and 19, which aim to freeze tuition and cut costs, say they could keep college affordable and accessible, local colleges say tuition increases over the last few years are a result of less state aid and the need to provide more services to students.

“Our formula funding is actually less than it was 10 years ago. All 38 public universities [in Texas] are dealing with that,” said Bill Staples, president of University of Houston Clear Lake. “The real overarching trend has been state appropriations have gone down and tuition has gone up.”

Universities are not only gearing up for tuition reform. Public institutions of higher education are gearing up for  a possible $330 million slash in state appropriations, according to the senate budget that passed.

Legislative solutions

In January, Sen. Kel Seliger, R-Amarillo, filed SB 18 and SB 19, which would eliminate a rule requiring universities to use a portion of tuition revenue to fund scholarships for students with financial need, and freeze tuition prices for incoming freshmen for two years, respectively.

Another bill also filed by Seliger, SB 543, would require state schools to meet performance-based metrics—graduation rates, number of undergraduate degrees awarded and average length of student enrollment—before being allowed to raise tuition.

“Tuition relief and predictability is necessary for Texas students and families,” Seliger said. “Senate Bill 19 provides much-needed stability for those planning to attend or [are] attending college.”

Although freezing tuition and fees may keep rates down in the short term, Staples said it would put public universities in a difficult situation where expenditures could outstrip revenue  due to the continued reduction in the state’s cost-per-student funding for higher education.

“That, I think, not just for UH-Clear Lake but for all public universities, would be devastating because again we’re back to this same trade-off between state appropriations and universities charging tuition and fees,” Staples said. “It would put universities in a very difficult situation to say the least because then, tuition wouldn’t even be adjusted for inflation.”

This session, the THECB is advocating for a number of measures to help students afford the out-of-pocket expenses of college, including more paid internships, providing more work-study programs and implementing programs to award university credits for outside work.

“We can’t get to our goals doing business as usual,” THECB Commissioner Raymund Paredes said. “We’re going to substantially have to reinvent higher education.”

Legislators who support freezing tuition, whether through performance-based metrics or setting four-year rates for incoming students, say that it will help keep universities affordable and accessible.

“This is an attempt to recognize the obvious that tuition has gone up very rapidly, and we need to make sure we are maintaining an affordable cost of education for students entering higher education across the state,” said Sen. Paul Bettencourt, R-Tomball, who sits on the Senate Committee on Higher Education. Bettencourt co-authored SB 543.

SB 18, SB 19 and SB 543 were voted out of committee in late March and placed on the Senate’s intent calendar. If passed, these bills would go into effect Sept. 1.

State funding cuts

Every biennium, boards of regents for universities across the state project their expenditures, approve their budgets for the next two years and set tuition rates. However, boards of regents did not always have tuition-setting authority.

In 2003, the 78th Texas Legislature passed House Bill 3015, which granted regents the ability to charge varying tuition rates with no cap on the designated tuition per academic period.

Prior to HB 3015, the Legislature had the authority to mandate the same rate be charged across the state for public higher education institutions, according to the THECB.

Since deregulation, tuition has risen at public universities by as much as 178 percent—or an average of 70 percent after adjusting for inflation—from 2003-15, with students paying a statewide average of $1,687 more per semester, according to a report from the THECB. 

At UH, total tuition rose from $2,266 per semester to $5,404 per semester from 2003-15, a 139 percent increase, said Matthew Fuller, associate professor of higher education leadership at Sam Houston State University.

While the cost of attending college has gone up for students, universities have bulked up their student support, academic courses and student services.

At UH-Clear Lake, tuition and fee increases are diverted to new programs, student services, and faculty and staff raises, Staples said. Student services include math and writing tutoring centers, and career and counseling centers to boost graduation and retention.

“We want everybody that comes here to graduate, so we’ve got to provide services to help them on that path from student orientation all the way to
graduation,” Staples said.

This legislative session, the Senate’s budget—which was approved March 28 by the Senate—would provide $20.233 billion to higher education funding, which is $11 million less than the last biennium, or 0.1 percent, according to the Center for Public Policy Priorities. While Groves said community colleges would not see much of a change in funding, public universities would receive about $330 million in cuts.

Jason Smith, vice president for governmental relations for UH, said the Senate’s budget would cut 7.8 percent of UH’s appropriations, which includes $22.5 million in cuts to the university and $35.6 million to the UH system. Most of the cuts would come from special items, which he said pay for many of the university’s research initiatives.

The House’s budget—which the House passed April 7—provides $20.518 billion for higher education funding, a $273 million increase  from last biennium, according to the Center for Public Policy Priorities. 

Before the budget is approved for the biennium, the House and Senate will consolidate their differences before final approval. The potential deep cuts in state funding could mean a six to 10 percent dip in state funding per university.

The UH System’s operating budget for fiscal year 2016-17 was $1.7 billion: About 20 percent was state appropriations and 42 percent was tuition and fees. The system comprises four universities: UH, UH-Downtown, UH-Clear Lake and UH-Victoria. The FY 2016-17 budget for UHCL was $154.6 million, with 28 percent comprising state appropriations and 54 percent comprising tuition and fees.

“The No. 1 reason [for tuition increases] is the support of higher education is declining, and we’ve got to make that up somewhere, or we’ve got to cut services,” Fuller said. “[Students] don’t want us to cut services ... we’ve got to make it up somewhere.”

Affording education

While Texas ranks seventh in nationwide higher education affordability, students enrolling a in a public four-year school typically need to borrow more than $4,400 annually to pay for expenses, according to the 2016 College Affordability Diagnosis from the Penn Graduate School of Education.

Most students who take out student loans do so through the Free Application for Federal Student Aid, or FAFSA. However, those loans may not cover the full cost of university attendance, especially for low-income families.

At Pearland ISD, which has a student population of roughly 22,000, 26 percent of students were eligible for free or reduced lunches through the National School Lunch Program, according to a 2015-16 report from the Texas Education Agency.

At Friendswood ISD, about 9 percent of its 6,000 students were eligible for free or reduced lunches, and about half of Alvin ISD students were eligible as well. To receive free or reduced lunches, families must meet income eligibility requirements.

“What concerns me is many of these students are academically capable but economically challenged,” Staples said. “As we’ve had to increase tuition because of the relative decline of state appropriations via formula funding, are we at some point going to price these students out of higher education?”

Although the proposed SB 18 would eliminate the mandate for colleges to fund need-based scholarships from tuition revenue, UHCL said it has doubled its efforts to reach economically disadvantaged students through its Hawk Advantage Scholarship.

And at UH, students can opt into a fixed tuition for those who are eligible, said Shawn Lindsey, director of media relations and digital programming.

In 2014, UH implemented “UH in 4,” a fixed-tuition program for freshmen and transfers. Students are required to complete 30 credit hours per year and remain in good academic standing. The fixed-tuition does not freeze tuition at the time of enrollment. Instead, a separate four-year rate for fixed tuition is set.

“The development of these programs and the fixed-tuition model is largely in response to rising tuition rates statewide, fueled by long-term decreasing support from state revenues,” Lindsey said.

Additional reporting by Emily Donaldson and Wendy Cawthon