Tuition Deregulation

Definition - Tuition deregulation is a euphemism for a change in the Texas Constitution which would take the power to set tuition from the Texas Legislature and give it to the UT-system Board of Regents, an unelected and unaccountable cadre of politically-connected businesspeople. The bill passed in the 78th Legislature, HB 3015, gives the Regents this power.

What this means

Currently, the Regents have the authority to implement fees (e.g. Union Fee, Students Services Fee). Usually fees are designed and introduced by the UT administration and then unanimously approved by the Regents. Using fees, the University has been able to skirt the Texas Legislature which is not inclined to promiscuously raise tuition every time UT lobbies for it. In 2002 UT passed an infrastructure fee, which, due to its size, was stopped by the State Attorney General. As a consequence, fees have risen at a much greater rate than tuition. The partnership between unelected administrators and unelected Regents has proven fruitful. However, University administrators and the Regents were no longer satisfied with just controlling fees going into the 78th Legislature. The Regents and administration were obviously frustrated with the regulations that the state imposed in order to protect and guarantee its citizens an affordable university education. For years, the two have pushed for a complete consolidation of control over the cost of education.

UT-Austin President Larry Faulkner has been a champion of deregulation, as part of a package he calls flexible tuition. He argued for it in his annual report to the Legislature in 2001, instead of badly-needed funds for a deteriorating physical plant. The regents, Chancellor Mark Yudof, and President Faulkner put almost all their energy for the 2003 session into a push for tuition deregulation. Charles Miller, a pro-privatization zealot, lead the way. Indicative of his mindset, the Daily Texan reported that "Miller said that the aim of deregulation is not to gain the ability to raise tuition, but to gain the ability to set different tuition rates for different programs in the manner practiced by private institutions" (italics mine). (The Daily Texan, 12/20/2002). Representative Geanie Morrison R-Victoria, the author of HB 3015 (the tuition deregulation bill that passed), went a little further when she said, "We need to run them as a business as they should be", referring to universities. (The Daily Texan, 6/02/2003)

Increasing Tuition

Tuition deregulation will lead to increased tuition. The Regents are not elected, and are not accountable to the public, even though UT is a public institution and receives taxpayer dollars to provide a public service.

"If you wanted a benchmark, the best I could do is to say that the tuition at UT-Austin is 27 percent lower than the tuition at comparable universities around the country," Yudof said. "They have roughly the same cost structures we do, and we charge 27 percent less tuition" (Austin-American Statesman, 2/14/03). Look very carefully at the wording: "tuition is 27 percent lower..." Yudof is using tuition in the technical sense (the tuition set by the legislature), to mean something different than its common usage, which includes tuition AND fees and refers to the $5,400 average that undergraduates pay. If you take the common-sense meaning, UT is not lagging behind its so-called "peer institutes" and is in fact closer to the top.

Tuition deregulation has been tried here before their success in 2003 - with disastrous (but predictable) results. In 1991, at a time when the state was mandating that UT cut its budget, UT officials were pushing tuition deregulation as the panacea to all higher education’s financial woes. Students, at that time, remembered when the Board of Regents in 1987 usurped legislative control of some graduate tuition in the schools of Law and Business. Tuition promptly doubled in the Graduate School of Business and rose 87% in the School of Law. Students mounted a serious offensive against deregulation: lobbying legislators, leading marches, and writing letters. The hard work paid off- deregulation passed in the Senate but failed in the House.

Managing Students

Faulkner and Miller pitched deregulation as a way of trimming unnecessary restrictions and streamlining tuition and fees. However the bureaucracy for calculating and implementing a variety of different tuition and fees for different majors, classes, etc would no doubt be, at the very least, the same size under “regulated” tuition.

It is clear that the Regents and Administration desire increased flexibility in charging tuition rates, however what does that mean for students, besides higher tuition. Judging by quotes such as “We will be able to tailor rig to demographics and age characteristics” from Yudof and “A governing board may set a different tuition rate as the governing board considers appropriate to increase graduation rates” from HB 3015, the tuition deregulation bill, it seems that the Regents and administration want to be able to manage students better. This means speeding them up in their junior and senior years to ensure graduation and channeling students into majors that businesses in Texas want. This is what Yudof means when he says that “The only limits are our creativity,” (The Daily Texan, 6/04/2003).

In the UT System's Highlights of the 78th Legislature under the section entitled "Key Legislation" their analysis of tuition deregulation points to "enrollment management" as one of the prime reasons for having deregulated tuition. The Regents have made it clear that they intend to use tuition as a tool to shape the activities of the student body of Texas.

We can now understand former UT Chancellor Hans Marks statement in 1991, "Tuition is primarily a mechanism for supplanting our income. It doesn't amount to a big fraction of it, as you know. The academic budget of UT-Austin is $550 million, and we can earn about $20 million in tuition. The only justification for tuition today is to supplement the budget and to demonstrate to students that they are getting something of value. When you get something free today, there is a tendency to say it is not valuable." In other words, "we don't really need you to pay tuition except to make you work for your grades."

Different Schools, Different Rates: Two-Tiered Higher Education

Their arguments that deregulation allows them to set different tuition for different schools as a change from the status quo is a non-argument when one examines the tuition and fee structure currently in place. Schools in Texas already have different rates of tuition since the Legislature only sets a cap, not the actual rate. The regents have argued that all schools in Texas cost the same despite their differences in prestige and quality of education. But since each school sets fee rates, there are major differences in the cost of education between schools. For example, as of the 2002-03 school year UT-Pan Am costs around $2,500 per year for tuition and fees, while UT-Austin costs around $5,400.

The change to tuition deregulation is that Regents can now radically increase the differentials between universities. Higher education in Texas could eventually become (more of) a two-tiered system. The regents, because of their insulation to the Texas public, cannot be held immediately accountable for accessibility issues concerning UT-Austin. Middle and lower income students will be channeled to the non-flagship schools in the UT System, with UT-Austin reserved as a bastion for upper class students. [This is a national trend] Armed with the arguable fact that most UT-Austin students are affluent enough to afford tuition increases, proponents of tuition increases will get their way, creating a vicious feedback loop in which the lack of poor students is justification for the very thing that prohibits them from attending UT-Austin.

The regents did put together a package called the Texas Compact, whereby students from families making under the Texas median income of $41,000 would receive free tuition. But this plan was scrapped by March of 2003.

Privatizing the University?

The free-marketeers up in the Tower gave up on the state and sought the money they want from students rather than forcing a legislature, stingy on helping schools but not prisons, to step up to the plate. Gov. Perry, Lt. Gov. David Dewhurst, and Speaker of the House Tom Craddick have all threw their support behind tuition deregulation, with special effort by Craddick to ramrod it through. This is no surprise considering the free-market ideology that underlies deregulation in general, not to mention the fact that Perry appointed several of the regents.

From the Austin American-Statesman: "Deregulating tuition is likely to be the only answer to our budget constraints," said Rep. Fred Brown, R-College Station, chairman of budget and oversight for the House Higher Education Committee (Austin-American Statesman, 2/13/03). Interestingly Lieutenant Governor David Dewhurst, states that tuition deregulation “has nothing to do with balancing the budget.” The power shift of tuition deregulation and the ensuing increased management of student’s lives are the real motives behind deregulation.

Could tuition deregulation be one part of a process whereby the university is being privatized? Privatization means that the government plays a smaller role in the funding of the university and the university begins to act more and more as a private business. Thus the university would be less accountable to the public interest, higher education for the public regardless of ability to pay, and more beholden to moneyed interests. Funding for programs and for students begins to become based increasingly on their ability to “make money.” The university as a site for the free pursuit of knowledge is being discarded in favor of a social factory with students as the worker-product the result. This has been true in UT's case, even before tuition deregulation. The UT administration has rewarded themselves with pay raises and pumping money into pet projects while coming at a price to the vastly underpaid workers and students via limitless tuition.

Why tuition should not be deregulated

  • Giving the power to charge for a public service to an unelected body such as the Board of Regents amounts to taxation without representation! The Regents are not elected and therefore not directly accountable to the Texas public. UT is a public institution and should be accountable to the public's interests.
  • It's a proven failure. In 1987, tuition was deregulated for graduate students. The result? Within two years, tuition doubled in the Graduate School of Business and went up 87% in the School of Law.
  • The Board of Regents, pushed hard by the Budget Office and President Faulkner, already passed an illegal infrastructure fee. It was the single largest fee ever implemented in this school's history, and it took the Attorney General to halt it.
  • Students feel the burden. Deregulation is a funding plan for universities to get more revenue - from YOU, not from the state or from the feds.
  • The Regents are constantly approving new building projects during a state budget crunch. The funding often comes from tuition revenue bonds.
  • An alternative to deregulation: Use the money we already have!
  • Deregulation hurts accessibility. Low-income and minority students are turned off by growing tuition and fees. As the numbers go up, higher education becomes a pursuit of the rich. In rough economic times, even the middle class begins to shy away from overpriced education. Higher tuition also discourages students with undergraduate degrees from pursuing post-graduate work.
  • The Texas Legislature mandated (in the 1870s) that the University "place within the reach of our people, whether rich or poor ... a thorough education ... to male or female on equal terms, without charge for admission."

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Other Sites of Interest

YCT Blasts Tuition Deregulation as Attack on Middle Class Families

Tuition deregulation in BC "shortsighted and mean-spirited," Association says

OPIRG Kingston - Coalition Against Tuition Deregulation