Universities want to set their own tuition; Opponents fear huge cost jump if Legislature gives up rate-setting

By Joshua Benton
Staff Writer

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Texas’ universities believe there are plenty of parents who could afford to write bigger tuition checks every semester. Now they want the power to tap into that wealth.

The state’s top education officials are asking the Legislature to give up its traditional power to set tuition rates at all the state’s universities. They want university system leaders to be able to set their own rates – something opponents fear will lead to big jumps in what students pay.

“If you totally deregulate tuition, I’d be hard pressed to explain to anyone how public universities would be any different from SMU,” said Sen. Steve Ogden, R-Bryan.

The idea, which proponents call tuition deregulation, has attracted some prominent supporters, including Gov. Rick Perry and likely House Speaker Tom Craddick. Both the University of Texas System and the Texas A&M University System have made tuition deregulation one of their top priorities for the upcoming session.

“Once you get past all the heat and get to the light, we’re talking about autonomy,” said Charles Miller, chairman of the UT System Board of Regents. “If we don’t have it, we don’t have the ability to run our institutions effectively.”

For decades, the Legislature has set base tuition rates – currently $44 per credit hour – during each of its biennial sessions. Universities and their system regents have more flexibility in setting other fees and costs, which typically more than double the total cost of attendance.

Without the ability to set pricing, universities can’t efficiently use their resources, Mr. Miller said. For instance, if a university wants to draw more students into unpopular afternoon classes, it might charge lower tuition for them. Lowered tuition for summer school classes might increase enrollment and get more students through the system more quickly.

On the flip side, classes in expensive fields like engineering might have a higher sticker price. When deregulation has been tried elsewhere, it has often led to substantial increases in tuition.

“Deregulation is a way for universities to offset the fact that legislatures are cutting higher ed funding,” said Carl Krueger, a policy analyst for the Education Commission of the States. “But the disadvantage is that students will wind up paying much higher tuition.”

“It’s scary,” said Forrest Wilder, a University of Texas senior who plans to lobby against the idea. “College isn’t unaffordable now, but it will be soon if it keeps going up.”

Mr. Krueger said the closest analog to what Texas is proposing may be in Canada, where several provinces are deregulating tuition for professional and graduate schools.

“At the University of Toronto, law school tuition used to be $4,000 or $5,000,” said David Robinson, associate executive director of the Canadian Association of University Professors. “Now it’s jumping to $22,000.”

He pointed to studies that indicated fewer Canadian college students with below-average incomes were getting degrees after deregulation.

UT System Chancellor Mark Yudof has made a counteroffer on that point. He has said that, if given the power to set tuition, the system will offer free tuition and fees to any student whose family income is below the state median – about $41,000 a year.

The plan: If UT can raise tuition, wealthy families who can afford it will pay more. Some of the extra money generated can be put to greater financial aid for poor and middle-class students.

“You’ve got to optimize the system and make sure the right people are paying the right prices,” Mr. Miller said. “Parents might say to their child, ‘If you go to Texas, I’ll buy you an SUV with the money I save from you not going somewhere else.’ Well, maybe they’ll drive a Toyota if tuition is higher.”

Mr. Ogden, who co-chaired a joint legislative commission that studied the issue last year, said he’s hesitant to deregulate. But he said he will support an experiment: deregulating only summer school tuition rates.

“I think the Legislature has an obligation to control what state institutions charge the citizens of this state,” he said.

Ten states give legislatures the power to set tuition. In other states, the responsibility generally rests on a state coordinating board, a system governing board, or the college itself.

Both sides agree that the state’s current budget problems will play a role in the Legislature’s discussion of the issue. With a multibillion-dollar deficit, legislators may be happy to shift more funding responsibility to the colleges themselves.

Tuition rates have been increasing steadily, even with the Legislature setting the rates. The cost of attending a Texas four-year college has increased 63 percent in the last decade, according to a study released last year by the National Center for Public Policy and Higher Education. That’s the fourth highest rate of increase in the country.

But even with those jumps, Texas schools remain a comparative bargain. The annual cost to attend a Texas school is $2,841, that study said – more than $500 less than the national average.

“I’m always open to new ideas, but I want to make sure that middle-class and low-income students have the access to higher education,” said Sen. Gonzalo Barrientos, D-Austin.