University costs have risen 18%

State average is 59 a credit hour

By: Monica Wolfson, Scripps Howard Austin Bureau
Corpus Christi Caller-Times
July 21, 2004, Wednesday

AUSTIN - Tuition and fees at Texas' public universities have increased an average of 18 percent since tuition deregulation began less than a year ago, officials with the Higher Education Coordinating Board told lawmakers Tuesday.

Texas A&M University-Texarkana has the least expensive tuition in the state; University of Texas at Austin has the most expensive.

Four university system chancellors told lawmakers Tuesday that they can't continue to raise tuition to offset declining state funding, especially if lawmakers expected them to increase enrollment by 300,000 students over the next few years.

"Tuition deregulation may not be a good strategy to fund growth,'' David Smith, chancellor of the Texas Tech University System, told a joint meeting of the Senate Finance Committee and Subcommittee on Higher Education.

Designated tuition, which is the local amount universities can charge per credit hour, was regulated by the Legislature until last fall. But lawmakers passed legislation allowing universities to set their tuition rates, hoping that it would offset cuts in state funding.

'Sticker shock'

Under the deregulated system, 12 institutions currently charge less than $48 per credit hour, while 22 charge more than $48. The state average for designated tuition is $59 per credit hour.

"There has been a shift to students who are paying a higher share of the cost of education, but that's been going on since 1985," said Teri Flack, deputy commissioner of the Higher Education Coordinating Board. "We do believe sticker shock has an impact."

Most university officials said it was too soon to evaluate the impact of tuition deregulation because it's only been used for two semesters so far.

Sen. Tommy Williams, R-Woodlands, questioned whether the Texas A&M and University of Texas systems increased tuition too much.

40 percent for faculty

The University of Texas System has increased tuition by $120 million and tuition at the A&M system rose by $35 million. All schools have to set aside at least 20 percent of tuition increases for financial aid. Both UT and A&M are using almost 40 percent of the money to hire new faculty and improve faculty salaries.

UT and A&M have millions of dollars saved in the Available University Fund, which the two systems use to pay for construction, Williams said. "You could have used some of that money to mitigate tuition increases," he said.

University of Texas System Chancellor Mark Yudof disputed Williams' assertion.

"You think you can fix this problem with one-time only money?" Yudof said. "I don't think so."

Much of the money in reserve is dedicated to paying bond and construction debt, said Benton Cocanougher, interim chancellor of the Texas A&M system.

University officials also worried about the prospect of future budget cuts as Gov. Rick Perry ordered agencies to prepare budgets with a 5 percent budget reduction.