Lawmakers deregulate UT tuition
By Delaney Hall
June 2, 2003, Monday
After days of political wrangling between the Texas House and Senate, a tuition deregulation bill passed Sunday that will begin to affect the University of Texas next spring.
The compromise, hammered out by a conference committee, will transfer the power to raise tuition from the Legislature to independent system boards that run Texas public colleges and universities. However, the compromise also requires the boards to answer to a legislative oversight committee and devote 20 percent of revenue generated from the increased tuition to financial aid.
The original legislation, House Bill 3015, authored by Rep. Geanie Morrison, R-Victoria, called for immediate deregulation with few legislative checks. The Senate, however, led by Sens. Florence Shapiro, R-Plano, and Royce West, D-Dallas, offered several amendments that provided for a slower and more graduated deregulation process.
The new legislative oversight committee will review universities' policies every two years to ensure they've increased graduation rates, retention rates, minority population, overall educational experience and financial aid availability, Shapiro said. Additionally each university will be required to file an affordability report.
The University will begin preparations for the change beginning in the fall, and students can expect a tuition increase for the spring semester, said UT President Larry Faulkner.
"I've always believed that a deregulated environment is a more efficient environment," Faulkner said. "We are as attuned to this issue as anyone. I'm aware of this University's role in Texas. One of the most important roles for a public university is to be accessible to the state's population. We will take careful steps not to outprice anyone."
Tuition deregulation comes as a result of state budget shortages and inadequate funding to public universities across the state, said Monty Jones, a UT System spokesman.
Though deregulation has been discussed in the past few legislative sessions, it has come to the forefront now because of underfunding for public universities across the state.
"We cannot afford to fund higher education to the amount they need to function," said Morrison. "We need to run them as a business as they should be."
The deregulation bill will allow for a $23-per-credit-hour increase over the next two years. That amount, however, is merely a ceiling, and certain campuses may choose not to increase their tuition at all.
Opponents of deregulation worry that a market-driven system will result in educational inequalities among various campuses in Texas, middle-income students will bear a heavy financial burden and governing boards won't be accountable to students.
"We worry that deregulation will create a two-tiered educational system," said Sly Majid, SG vice president. "The students who can afford to go to UT will go to UT, and other students will go to satellite schools, less prestigious ones that are more affordable."
Jones said deregulation would create a system based on certain market principles such as supply and demand, but he emphasized that the Board of Regents and other governing boards would be cautious about raising tuition too high, too fast.
"Higher education is not a business," he said. "We don't look at this as a private institution. Though the Legislature will be appropriating a smaller amount for education, that doesn't mean we won't still be a public institution serving the public. It's not the same as a private manufacturing firm, but there are some basic strategies of economic governance that can apply."
Opponents of deregulation have also voiced concern that the middle class will bear the financial burden of deregulation. Many students from middle class families don't qualify for financial aid but will need to pay increasing tuition costs anyway.
The 20 percent set-aside outlined in the deregulation bill would be used primarily to aid these middle-income families, said Shapiro. Both the University and Texas A&M University will set aside $2 million for every $10-per-credit-hour increase in tuition.
The 20 percent provision in the deregulation bill will replace earlier plans for the Texas Compact, a plan developed by UT System Chancellor Mark Yudof, which promised a fully subsidized education to any student with a family income below the Texas median.
Larry Burt, UT director of financial aid, said the amount should be sufficient.
"As long as there isn't a crisis in other aspects of student financial aid, we can help needy Texans pay for the tuition increase," he said.
Burt also said though middle income families have faced increasing tuition rates with relatively little support, there are low interest loans available even if the family doesn't qualify for financial aid.
The financial aid office will face a tremendous task as it prepares for deregulation in the spring, Burt said.
"We'll have to figure out the additional amount of money that students will be charged and the additional grants that they may receive," he said. "Some will get the full increase covered by grants. Others won't."
Students also can expect other tuition-related changes in the spring.
The University may look into a system of vertical tuition, under which certain more popular classes may cost more than others, offered at discounted prices because of unpopular times, either very early in the morning or late at night.
Faulkner said without the deregulation bill, departmental cuts would continue and fewer classes would be available.
"There's no doubt that changes will occur," he said "There's always a question of balancing the quality of education and the cost of it."