(Much) Higher Education

Does tuition deregulation mean that UT and A&M cost too much? It’s all a matter of degrees.

GROWING UP AS ONE OF EIGHT KIDS in a Houston family of modest means, I came to realize that an article of faith in our household decreed that all of us would graduate from college. And so we did: seven from the University of Texas and one from Sam Houston State University. The credit for our perfect record is attributable not only to my parents’ esteem for education but also to the generosity of the State of Texas, which made it remarkably easy for students to finance their own education. Tuition was rock-bottom—$4 per semester hour, or $60 for a full-time class load in 1973, my freshman year—and I was able to work in a dormitory cafeteria, get low-interest loans and grants, and take ten years to pay off the debt. Without this help, I could never have gotten the kind of education I received at a major state university.

And so, two years ago, I watched with more than casual interest when the Legislature conferred the ability to raise tuition rates upon the various boards of regents for all state schools. Since then, in rapid succession, the UT regents have hiked tuition from $92 per semester hour ($1,380 for the standard load of fifteen hours) to $142 per semester hour. Similar increases have occurred at Texas Tech, Texas A&M, and the University of Houston, sending parents and students scrambling for part-time jobs, loans, and grants. Throw in fee increases, and the annual bill for the average UT student has risen to $6,786 for fourteen hours.

Students from wealthy families will still find UT and Texas A&M to be a bargain, and those from poor families can expect to receive financial aid. The big losers in tuition deregulation are middle-class kids, who will have to go into debt to afford the state’s best schools. UT financial aid director Larry Burt acknowledges that the Austin campus has seen “a slight downward trend”—from 32 to 28 percent since 1999—of new freshmen from families earning between $40,000 and $80,000 annually. “The costs used to be low enough it didn’t matter,” Burt says. “Now, because costs have gone up, a student has to think, ‘Do I want that particular college and the potential costs, or do I want to go to a different college?’”

UT chancellor Mark Yudof, a longtime champion of deregulation, believes that students ought to view any increased debt as an investment. “No one likes to borrow money, but if you are going to earn $1 million to $3 million more over your lifetime than you would without the degree, should you borrow $20,000 at three percent? I think so,” he says. “When you look at the rate of return on your education and you can take out a low-interest loan, there’s no businessperson in America who would turn down an investment opportunity like that.”

That’s easy to say, unless you’re a senior making minimum wage, like Marcella Colbert, at Texas A&M. She began school with enough scholarship money to make ends meet but now has incurred about $10,000 in debt because of rising costs. After working at a minimum-wage job, she became a Mary Kay cosmetics consultant. “I have friends who have no idea I sell Mary Kay. It is not something I would have done if I didn’t really need the money,” says Colbert, one of six kids of divorced parents. Juggling work, study, and extracurricular activities—she’s active in student government—can be demanding. Despite her best efforts to budget, she was caught off guard by an especially big book bill last semester, which wrecked her planning. “No one tells you how hard it is going to be,” she says.

Fellow Aggie Phil Shackelford has formed the Texas Coalition for Student Affairs (Colbert is a board member), which he hopes will lobby against more tuition increases: “What it comes down to is a tax increase. They wanted to pass it through the back door and make the universities responsible. We’re moving towards a class-based education.”

All this started when the Legislature faced a $10 billion budget shortfall in 2003. The Republican leadership chose to cut spending rather than raise taxes, paring higher education by $260 million. Then, at House Speaker Tom Craddick’s insistence, it permitted the universities’ boards of regents to set their schools’ tuition prices. Later, the state’s leadership would boast about passing a balanced budget, neglecting to mention the price: tuition hikes that would hit middle-class families hardest. Though efforts were made to bolster financial aid for needy kids, the increased costs quickly drained the state’s $100 million TEXAS Grant program, leaving an estimated 22,000 newly eligible students out in the cold.

State senator Eliot Shapleigh, a Democrat whose district includes UT–El Paso, where tuition has been raised 33 percent over the past two semesters, calls tuition hikes “the student tax.” Some Republicans share Shapleigh’s concern about the sizable increases. “What we’re doing is just shifting the burden,” acknowledges Senator Robert Duncan, of Lubbock. “We’re just funding higher education through another source.” The law permitting regents to increase tuition tries to soften the blow for low-income students by requiring that 20 percent of the increase be set aside for grants awarded on the basis of financial need. But, as Duncan notes, while rich families can absorb the tuition hikes easily and low-income students are awarded grants, it’s the middle-income kids who most likely will be forced to take out loans to stay in school.

While Duncan’s and Shapleigh’s laments resonate with someone like me, I realize that Texas’s artificially low tuition rates built inefficiency into the system. Under the old system, a billionaire’s kid and a pauper’s paid the exact same rate. And because it was so cheap to go to school, many students began taking up to six years to earn an undergraduate degree. Under the new law, regents can adopt “flat rate” tuition, which UT plans to do, encouraging students to take heavier course loads and graduate in four years. “We were in danger of becoming like the Russian grocery store,”

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