Bevo Bucks the Students


Rising Tuition at UT-Austin: A Student Perspective(pdf)

(packet form(pdf))

A UT Watch publication

ISSUED SPRING 2004
RE-ISSUED FALL 2004

Bucking the Students

Summary

Debunking the Myths

  • Tuition has increased more rapidly at UT than at comparable universities contradicting common belief.
  • According to rankings by US News and World Report's America's Best Colleges 2003 of National Doctoral Universities, UT-Austin is the fifth most expensive school of the top 15 but has the fifteenth highest quality ranking. This contradicts the administration's argument that tuition increases are necessary in order to maintain quality control.
  • UT's revenue has increased over the previous decade while the number of students has remained steady at around 50,000. This contradicts the administration's claims that they need more money to support a growing university.
  • Administrators are spending most of our Capital Improvement money on new buildings rather than renovation, contradicting their claims that they want to repair older, academic buildings used by students and that they need our money to do it.

What's Really Happening

  • An increasing proportion of our tuition, state appropriations, and endowment money goes towards paying off UT's debt, due largely to these new building projects.
  • Most of these building projects, which are built off-campus for commercially-oriented endeavors, have nothing to do with students or education.
  • The result and goal constitutes part of a larger trend to redirect university resources into private businesses and for-profit ventures to the detriment of education.
  • Following the student rebellions of the 1960's and early 1970's, campus administrators found that increasing tuition provided a good way to manage students (Throwing Away the Ladder, George Caffentzis).
  • By both subsidizing business and controlling students, tuition provides a powerful tool used by the administration to transform the university into an overt business.

WHO DOES THE UNIVERSITY SERVE?

With tuition skyrocketing and most students and parents feeling left in the dark, this pamphlet aims to clarify budget issues and inform students of trends in university organization. Our current situation is nothing new; to the detriment of our education, tuition at UT-Austin has been increasing piecemeal over the past 30+ years. However, this trend has reached new heights. While the size of the latest tuition increase is unprecedented in UT's history, the power to set tuition rates has also shifted from the Texas Legislature to the Board of Regents, whose members are appointed by the governor, and are therefore unaccountable to Texas voters. Since President Faulkner and then the Board of Regents accepted the Tuition Policy Advisory Committee's proposal, tuition at UT-Austin increased by $720 per semester by Fall 2004 and by Fall 2008, it will most likely increase by $3,650 per semester to a yearly total of $12,500 (Tuition Advisory Committee public hearing, 09/24/2003). To get away with this, UT administrators have used misleading economic rhetoric to explain and justify their actions. They inaccurately portray a budget crises in order to rationalize their claim that they must increase tuition for UT to remain competitive with its peer institutions.

WHAT THEY WANT

UT Administrators aim to create an environment in which students will be more willing to accept tuition increases (as a way to control students and to channel resources into commercially oriented projects) by implementing a policy of austerity - namely, the $40 million budget cuts over the course of last year.

As we pay more, we are witnessing a decline in university services. This includes 500 less faculty and staff employees, a $3 million budget cut and the elimination of 144 staff positions for the Physical Plant, reduced library hours, less grounds-keeping, fewer teaching assistant positions, and cuts in individual departmental funding. Overall, "This downsizing would constrict University capacity by 15 percent to 17 percent - a decrease that would result in increased faculty teaching loads, increased class size, reduced scope and variety of courses and the elimination of electives, Faulkner said." (The Daily Texan 2/20/2003.) As a result, the quality of education will decrease and many students will find it more difficult to graduate after the numbers of classes available are reduced. Meanwhile, subsidized by students and taxpayers, business is booming in non-student areas off campus, particularly for biotechnology research at UT's health centers where a significant amount of expensive construction is set to take place. The evidence shows that the administration's arguments for budget cuts, like their arguments for tuition hikes, serve as a distraction for an agenda against student and public interests.

WHAT WE WANT

To better meet the needs of taxpaying Texans, we want to reclaim UT as a genuine institution of learning: a place where we all can come to learn what we want, at the rate we choose, and, provided teachers are willing, from whomever we choose. Tuition increases prevent this; we want to abate tuition in order to make UT more conducive to education.

We want the time and space to actually learn, which is contingent upon us having the time to ruminate, to share, and to create.

At the very least, we want to put a stop to tuition increases without a parallel increase in the quality of educational services. We want the input currently afforded to business in deciding how to allocate the budget. We want to end flat-rate tuition; we think that students should pay for what they get (pay per class) and that we should not be micromanaged using financial controls.

We want the university to be accessible to all Texans - rich, middle class, and poor - as UT is a public institution supported with taxpayer dollars in a regressive tax state. Tuition increases often cut out middle class students who do not have access to significant financial aid, while those from lower income families suffer from "sticker shock" - the initial price tag of a UT education prevents them from even attempting to attend even though, in decreasing amounts (The Daily Texan 10/14/03 and 10/17/03), financial aid is available.

We want UT to participate in research that is not directed to meet the needs of outside, private interests but aims to enhance an understanding of the world in a way that is critical and beneficial to society at large. Academic freedom should exist and can only do so as long as UT is not beholden to or an appendage of business or the military.

We want control over our studies, our time, our finances, and ultimately, our lives.

We want a voice in campus administration.

We want the university to serve us.

PERCENT INCREASE IN PUBLIC FOUR-YEAR TUITION AND FEES (2001-'02 TO 2002-'03)

Outpacing the National Average

TUITION INCREASES AT UT-AUSTIN

UT-Austin rates

(2005 rates are the ones proposed by the Tuition Policy Advisory Committee on November 16, 2004).

Taking out loans

Between 1995-2005, tuition and fees for a liberal arts major taking 15 hours has more than tripled from $983 to over $3,488 a semester.

Tuition has increased at a rate much faster than inflation. According to the 2002 UT Watch tuition study, between 1970 and 2002 tuition increased 391.5% for in state Liberal Arts majors, 361.9% for out of state liberal arts majors, 422.5%, for in state Natural Sciences majors, 374.4% for out of state Natural Sciences majors, 1,059.9% for in state Law students, and 723.3% for out of state Law students - in constant dollars. These figures are for students taking 15 hours and the tuition prices listed are for fall semesters only.

Tuition study online at:
http://www.utwatch.org/tuition/tuitionstudy.html

The Lie of Tuition as Quality Control

UT officials argue that tuition must increase for UT to remain competitive with peer institutions. They suggest that only way to maximize the quality of education at UT is to allow tuition to be controlled by the free market. Using their logic, the following chart indicates that tuition should actually decrease at UT-Austin. While UT is ranked 15th of National Doctoral Universities by US News and World Report's America's Best Colleges 2003, it is the 5th most expensive for in-state undergraduate tuition. These rankings reveal that UT is not a fair or competitive bargain for students deciding which public university to attend.

Top-ranked Public Universities and the Cost of Attendance: (2002-2003 Undergraduate Estimates)

The lie of quality control

UT officials justify the increases by saying that if the amount they charge is unfair, students will leave. However, a high demand is not the result of simply providing a better education; many people feel they have no choice but to come to college and pay whatever it takes. UT-Austin retains the largest student body in the nation despite being inequitably priced. In economic terms, this phenomenon represents a low elasticity of demand: for every incremental increase in tuition, there is a negligible effect on enrollment levels - a result of today's job market in which we need a degree to be viable. As of now, there are no checks on tuition, except direct resistance.

"WE'RE BROKE!"
AND OTHER ADMINISTRATIVE DECEPTIONS

UT administrators say that tuition must go up and that services must be cut because they don't have enough money. However, the following charts show that UT has plenty of funding to meet student needs, but that the administration is redirecting these resources away from students to serve other purposes.

The revenue breakdown

A CONTRADICTION: Over the past decade, state appropriations, adjusted for inflation, have remained roughly stagnant in dollar terms, while student enrollment has remained the same at around 50,0000 students. Despite the fact that the UT maintains the same number of students while the budget consistently grows - like from money from the "We're Texas!" capital campaign - they continue to raise tuition.

Enrollment figures

Last year, while the administration proposed more tuition increases, state appropriations to UT-Austin increased 0.52% and enrollment decreased 1.6%. Despite receiving more money from the state and outside sources, and supporting fewer students, UT administrators continue to raise tuition anyway.

WHERE'S THE MONEY GOING?
New Building Construction Bucks the National Trend

UT administrators claim they now need more money for the renovation projects they've been putting off for the past decade. It would improve the students learning environment to renovate those dilapidated buildings; however, the administrators show little interest in renovation. Eighty percent of the UT System's current capital projects consist of new building construction. By constructing new buildings rather than repairing old ones, UT bucks the national trend in campus construction projects demonstrating their disregard for students and education. According to a study by the Society of College and University Planning, "colleges and universities are focusing more of their efforts toward renovating older buildings in an effort to cut costs amidst the economic slowdown" and "that during hard times, three out of four college planners would abandon construction projects, and more than 65 percent of respondents said renovation plans would be cut or reduced." Yet UT is pursuing 166 projects worth $4.59 billion, most being new building construction. (Source:
http://www.utwatch.org/oldnews/texan_construction_7_25_01.html)

Although some of the increased expenses are justified due to a genuine need to update technology and renovate old buildings, a significant proportion of tuition revenue goes towards these new building projects, which have little impact on students' education.

UT System Capital Improvement Program (CIP) 2004-2009
Total- $4.59 Billion

Finance breakdown

"The CIP is a six-year projection of major repair and rehabilitation and new construction projects to be implemented and funded from component and System-wide revenue sources."
Source: http://www.utsystem.edu/FPC/docs/cip%20pdf/BOR_2004-2009.pdf

This means

UT System can fund projects outside UT-Austin with our money!
 


HOW THEY ARE USING OUR MONEY

The UT System pays for capital improvement mainly through debt-financing; taking out bonds to pay for the projects, then paying off the debt with tuition and fees, gains from UT's endowment and state appropriations. As a result, growing debt service payments directly reduce money available to students.

Breakdown of $1.35 Billion Overall Academic Capital Improvement Program (CIP) Funding
Finance breakdown
Got debt?

Permanent University Fund (PUF) Bonds - Bonds authorized by Article VII, Section 18 of the Texas State Constitution. The bonds are repaid from investment income generated by the PUF and deposited to the Available University Fund.

Revenue Financing System (RFS) Bonds - Bonds issued by the U. T. System Board of Regents for projects that will typically generate an income stream or student fee that will be used to repay the bonds.

Tuition Revenue Bonds (TRB) - Bonds authorized by the Texas Legislature. Tuition bonds are issued by the UT System Board of Regents under the Revenue Financing System debt program. The bonds are repaid from tuition collected at the component institutions.

From the graph above, very little of the funding for academic construction projects comes from gifts or grants as UT-Austin Chief Financial Officer (CFO) Hegarty and the Regents claim. About 21% comes directly from tuition through designated tuition or through repayment of tuition revenue bonds, while Revenue Financing Bonds, potentially repaid through increasing student fees, essentially more tuition, comprise another 47%. Therefore, the actual amount students directly pay for capital improvement projects ranges from 21-68%. When administrators allege a budget crisis, it is largely in order to pay off debt for their new building projects.

FINANCING EXPANSION:
A SAMPLING OF UT'S NEW BUILDING PROJECTS

Projects at University of Texas Medical Branch at Galveston

*Research Facilities Expansion (includes animal testing facilities)
Cost: $48,000,000
- $20,000,000 from Tuition Revenue Bond Proceeds
- $18,000,000 from Permanent University Fund Bond Proceeds
- $10,000,000 from Gifts and Grants

*University Plaza Development
Cost: $25,000,000
- $15,000,000 from Revenue Financing System Bond Proceeds
- $10,000,000 from Hospital Revenues

Projects at University of Texas Health Science Center

*Research Expansion Project: Institute of Molecular Medicine
Cost: $120,000,000
- $70,000,000 from Gifts and Grants
- $50,000,000 from Permanent University Fund Bond Proceeds

Projects at UT-Arlington

*Chemistry and Physics Building
Cost: $39,875,945
- $16,635,945 from Tuition Revenue Bonds
- $13,000,000 from Permanent University Fund Bond Proceeds
- $10,240,000 from RFS Bond Proceeds repaid by UTA's Designated Tuition funds

Projects at UT-Austin

*Biological Science/Wet Lab building: $37,452,830 (spending in FY 2004-5; $60,000,000 total
-$39,000,000 from the PUF
-$21,000,000 from designated tuition

*Biomedical Engineering Building
Cost: $25,000,000
-$25,000,000 from designated tuition

*Gregory Gymnasium Aquatics: $11,250,241 (spending in FY 2004-5); $12,360,000 total
-$7,300,000 from Revenue Financing System (repaid with $10 per semester fee)
-$4,460,000 from Auxiliary Enterprise Balances
-$600,000 from designated tuition

*Hotel and Conference Center: $55,000,000
-$45,000,000 from Revenue Financing System
-$10,000,000 from grants

Though the value of some new buildings, like Gregory Gymnasium Aquatics, is debatable, at least students can enjoy the use of these facilities and benefit from them, unlike the majority of the CIP projects which are not even located at UT-Austin.

WHY THEY ARE TAKING OUR MONEY :
REDIRECTING UNIVERSITY RESOURCES AWAY FROM STUDENTS

As a result of an unofficial federal policy that began in the 1980's, UT's mission has been extended to include creating "economic growth" and "development" (Entrepreneurialization, Resistance, and the Crisis of the Universities: A Case Study of UT, Robert Ovetz). The resources of the university were to be used directly by business - as opposed to indirectly through providing an educated workforce. Universities are now expected to stimulate economic growth without a corresponding increase in state appropriations. Not deterred by these difficult demands, UT administrators willingly turn to the students to fund their projects.

The Microelectronic and Computer Technology Corporation (MCC) debacle provides a poignant example of this process. In an effort to attract MCC to Austin in 1988, UT spent $34 million buying land and building a facility at which MCC would pay rent at $2 per year. Contributing nothing to education, the students and taxpayers footed the bill, while a private, outside interest reaped the benefits. MCC then went bankrupt in 1997.

Though made poignant by its bankruptcy, the MCC's negligible contribution to students or society is not unusual. Recently, the Federal Reserve Bank of Minneapolis released a report stating its disapproval of using universities directly for business interests. They state, "The cost of university-funded, commercially oriented research is what is forgone in the way of education and basic research." At the same time, "not only do the costs appear high, but also estimates of the benefits from university-funded commercially oriented research are low; they may even be zero." Additionally, "And ironically the more successful the university might be in turning out patents and financially successful products, the more likely the returns are negative. The returns are positive (and we estimate to be quite large) only when the university is educating the local workforce and doing basic research, research that private industry would not do on its own." (Source: http://www.minneapolisfed.org/pubs/fedgaz/01-11/rolnick.cfm?js=0)

Despite these admonitions, UT administrators deceptively claim that reorienting the university to meet business needs will bring in money for the university, which can then be used for students. UT did "earn more than $4 million from its licensing fees" in 2002 (Austin-American Statesman 7/6/03). However, because of researcher salaries, new buildings, new equipment and other infrastructural development for these businesses, a lot of institutional money goes into such research, but none of the licensing fees go back into general revenue for the university. From the same article, "[of that tech transfer revenue] half is shared with the professors who create the ideas, and half is kept by Nichols' office [the UT Office of Technology Transfer]. By law, all royalties must be used to further technology transfer." What little money that comes in pays for the cost of the research and to pay UT's Office of Technology Licensing for its services, none of it benefits students at large. Considering the institutional expenses, UT is not making money; it is redirecting it away from students and into business. Students must pay increasing tuition for the now neglected areas of the university that do benefit them in addition to subsidizing business.

UT administrators have no qualms about using students to subsidize business while resources for education languish.

TO THE DETRIMENT OF EDUCATION

To the detriment of education

The private sector benefits from the reorientation of the university, but provides only nominal financial support to the university. The funding for commercialized research comes largely from the federal government with our tax dollars, and the universities themselves, not businesses. In the Science and Engineering Indicators 2002, the National Science Foundation reports "the Federal Government provided $17.5 billion, academic institutions $6.0 billion, state and local governments $2.2 billion, industry $2.3 billion, and other sources $2.2 billion." The NSF also states "the increased relative emphasis on research activity at public institutions was offset by a decline in emphasis on instruction." Thus, money is redirected away from instruction (ostensibly, what students are paying for) and directed towards research projects geared towards government and economic development. (http://www.nsf.gov/sbe/srs/seind02/c5/c5h.htm)

Conversely, the money received from outside interests often comes with stipulations, i.e. it can only be used for a specific purpose and contributes little to the university at large. Whereas tuition money can be used for anything and partially funds these projects. For example, federal R&D money flowing into UT does not contribute to instructional facilities.

 

Total FY 2000 Federal Science & Engineering (S&E) obligations at the University of Texas-Austin by agency and category of support
(Dollars in thousands)

Agency R&D R&D Plant Facilities for Instruction Fellowships General support for S&E All other S&E
Total 134,977 257 0 3062 395 21158
Some selected agencies
Department of Defense 56480 0 0 0 0 16768
Department of Energy 11653 0 0 0 0 0

NASA

9706 0 0 639 0 452
National Science Foundation 26286 257 0 747 0 2673

SOURCE: National Science Foundation/Division of Science Resources Statistics, Survey of Federal S&E Support to Universities, Colleges, and Nonprofit Institutions

 

TUITION AS AMMUNITION
Reorganizing Student Life

Not only are tuition dollars being used to subsidize commercially oriented projects as part of an administrative strategy of market expansion, but tuition itself is used as a form of control over students.

  • Exclusion - High tuition excludes many people who cannot afford it and those who refuse to go into debt. According to the National Center for Public Policy and Higher Education, increased tuition rates kept 250,000 people out of college last year.
  • Parental dependence - Some students can pay outright, or rather our parents can. Having to depend on our parents puts us in a demeaning position resulting in a loss of autonomy. For parents, this means they have to wait even longer for their kids to become independent and able to take care of themselves. According to an informal poll on MonsterTRAK, an online global careers network, 63% of responding college students plan to return home after graduation, and 22% of them for more than a year, because of debt.
  • Debt peonage - More subtly and more effectually, high tuition redirects student life within the university towards exclusively economic pursuits. According to Public Interest Research Group, the average college student leaves with $17,000 in student loan debt plus an additional $2,327 in credit card debt (USA Today). This has a tremendous impact on our lives: preparing to get a job to pay off the debt, we feel pressure to neglect our own desires and pursue more marketable majors, which leads to a further restructuring of university priorities towards exclusively profitable programs.
  • Speed-up - To accumulate less debt, we feel compelled to rush through school and to take heavier course loads, resulting in more stress and fewer opportunities for personal exploration. To rub salt in our wounds, the Board of Regents recently passed a flat-rate tuition policy, charging the same amount of tuition regardless of hours taken, effectively punishing those students who refuse to speed up.
  • More work - To pay for all this schooling and maintain a modest standard of living many of us take on waged work in addition to our schoolwork. USA Today states that about 77% of undergraduates at four-year colleges have jobs and about 26% of students work full time. Due to a high demand for low-skill jobs from such a large student labor force, wages for the entire area plummet, requiring those students dependent on a wage to work even more hours. Also, with the threat of having to pay full tuition hanging over their heads, TA, AI, and RA graduate students do about 90% of the work at the university with negligible compensation (A History of Graduate Student Organizing and Unionization in the US, Robert Ovetz). All of this work and stress leaves little time for actually learning.

Tuition and austerity amount to a restructuring of the university along economic lines, leading to a reorganization of student life antagonistic to student interests. By both subsidizing business, and controlling students, tuition provides a powerful tool used by the administration to transform the university into a business.

UT WATCH RESPONSE- FIGHT BACK

Tuition increases that are funneled into projects for private interests and not for students need to be stopped. It is time for the students of the largest university in the nation to draw a collective line in the sand and to defend UT as a public university affordable to all.

  • Critically analyze and question the information delivered during forums and meetings. Slick, high-speed PowerPoint presentations peppered with raw numbers rarely reveal the entire situation.
  • Argue for open Tuition Policy Committee meetings and a transparent tuition setting process that addresses student's concerns.
  • Contact administrators to express your views.
  • Inform yourself and your parents about UT financial issues and organization so you know better how and when to act.
  • Voice your concerns in and organize the departmental units where you're directly affected.
  • Become involved with one of the many campus activist organizations.
  • Demand a voice in university administration. This is our education; we fund a fifth of it; we should have a say in how the university is run.
  • Ultimately, students must bypass the red tape of campus administration. The UT System Board of Regents possesses the power to set tuition and they are the ones who approve all the projects driving up tuition. We must confront them directly to accomplish any change. Consider a student strike.
  • Defect. Help create alternative learning environments, like discussion groups or a free school, in which education is valued over job training.

"Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph." -Thomas Paine