Off the Kuff Rotating Header Image

tuition deregulation

Tuition re-regulation on the menu

There are different ways it could go.

Sen. Charles Schwertner

Tuition at Texas universities has more than doubled in the 12 years since state lawmakers authorized colleges to set their own rates.

Now legislators are pushing to take back that control. It’s not a new idea, but it stands a chance for the first time since 2003, when the state deregulated tuition, largely because it enjoys rare bipartisan support.

At least three lawmakers, including Houston Democrat Sen. Rodney Ellis, have filed bills to re-regulate tuition in some way. The chair of the Senate’s higher education committee Kel Seliger, an Amarillo Republican, plans to pitch tying tuition increases to performance by colleges – essentially making them earn a tuition bump. And Dan Patrick, the state’s new lieutenant governor, said last week that the “issue will be addressed this session.”

“It marries together Democrats, who want to make higher education more affordable, and tea party conservatives who are inherently suspicious of higher education,” Rice University political scientist Mark Jones said. “In some ways this is a way for the Legislature to do something about education, but with relatively low cost.”

[…]

Deregulation essentially transferred costs to the universities and their students. That’s something Texas and other states have done for decades.

A recent report by the U.S. Government Accountability Office says students are now paying public colleges more than the states are. Tuition accounted for 25 percent of the average public colleges’ revenue in 2012, up from 17 percent in 2003, the study found. That surpassed state funding, which accounted for 23 percent of schools’ budgets in 2012.

Texas now funds less than 20 percent of the University of Texas at Austin’s budget, for example, compared to 85 percent in the 1970s. State funding accounts for 22 percent of UH’s budget now, compared to 61 percent in 1985. Students now pay for 42 percent of the budget, compared to 11 percent 30 years ago.

[…]

While Ellis says he will advocate for additional funding for higher education, his bill to end deregulation is actually the stricter of the two senate bills that have been filed so far, because it would cap tuition at 2015 rates and require universities to get legislative approval to raise it. Mary González, a House Democrat from Clint, has proposed a similar bill.

The other Senate bill, by Schwertner, would allow for annual tuition increases based on inflation. Ellis and Schwertner have talked about finding a compromise bill, but Ellis said last week that he wouldn’t support inflation-based increases, which he said is “almost like institutionalizing the thievery from middle class families.”

The third possible route to re-regulation could fold in another popular higher education proposal: tying funding for universities to performance measures such as graduation rates. Seliger said he plans to file a bill that would tie tuition increases to those performance measures. He calls it “performance-based tuition.”

Seliger pointed out that while tuition has increased at a faster clip since deregulation, lawmakers weren’t doing much to keep it down before. From 1994 to 2002, tuition and fees went up 102 percent.

“It was still increasing at a pretty good rate, because people wanted to see universities make big increases in improvement,” he said.

See here for the background. Sen. Schwertner’s bill is SB233. Neither Sens. Ellis nor Seliger have filed their bills yet, but Sen. Ellis’ bill from 2013 was SB125; I would presume what he files this year is identical or almost identical to it. I prefer his approach, because the problem is that the state is not contributing enough to cover the cost of higher education. That was the deal made to cut costs in 2003; it was rotten then, and it’s rotten now. I don’t expect Sen. Ellis’ approach to be adopted, but now that Republicans have come to regret their past actions – most likely because they’ve finally started hearing it from their constituents – I have some hope that he and Sen. Schwertner can work out a deal that at least comes closer to his approach.

UPDATE: As noted in the comments, Sen. Ellis’ bill is SB255.

Some Republicans embrace tuition re-regulation

This is a welcome change, but let’s not be distracted by what isn’t being said.

Sen. Charles Schwertner

Tuition and fees at the state’s public colleges and universities would be capped at their current levels and only be permitted to grow at the rate of inflation under a bill filed Tuesday by state Sen. Charles Schwertner, R-Georgetown.

Schwertner telegraphed his filing of Senate Bill 233 for the 2015 legislative session in a Sunday column in TribTalk. In the column, he argued that because state lawmakers started allowing university governing boards to set tuition rates without legislative oversight in 2003, “the dream of attaining a college degree is becoming a nightmare for more and more Texas students.”

Average tuition and fees in the state have more than doubled since tuition was deregulated and, as Schwertner noted in a news release announcing his filings, that growth has significantly outpaced the rate of inflation.

“I think the Legislature has a responsibility to consider whether the deregulation policies enacted over a decade ago still make sense for Texas students,” he said in a statement Tuesday.

Here’s that press release from Sen. Schwertner referenced in the story. I’m glad to see some Republican acknowledgment of this problem, but if you read Schwertner’s TribTalk piece and you’re old enough to remember the year 2003, you will note what is prominently missing from his words: The fact that tuition deregulation was passed by Republicans at that time as a way to deal with a budget shortfall by allowing the public universities to set their own tuition rates in return for getting less funding from the state. If Schwertner and Greg Abbott are truly serious about this, they will acknowledge that simply capping tuition without making up the reduction in state funding for public higher education will cause other problems and is just shirking responsibility altogether for those problems. This is a good start, and kudos to Schwertner for being the point person for it, but it’s only part of the puzzle.

Democrats, at least the ones that weren’t in then-Speaker Tom Craddick’s pocket in 2003, opposed tuition deregulation and have fought to repeal it since then for precisely the reasons laid out by Schwertner, with the crucial difference being that they support the state paying its fair share. A Legislative Study Group report on higher education that I linked to in 2008 but which is unfortunately not at that URL any more covers a lot of this ground. Note the line about California having ten tier one universities that Abbott alluded to the other day. That LSG report also included an op-ed by Rep. Garnet Coleman from 2004, in which he correctly predicted everything that’s now finally being acknowledged today. Here’s an excerpt:

Gov. Rick Perry and House Speaker Tom Craddick exerted unyielding political pressure to compel the tuition deregulation bill’s passage, using Texas’ $10 billion budget shortfall as the rationale. While top state officials were patting themselves on the back for not raising taxes, they were saddling Texas college students and their families with staggering hikes in tuition rates.

Perry claimed in his State of the State address that education represents the greatest investment we can make in a future of prosperity. He then agreed to slash general revenue funding for higher education by $259 million, which includes his veto of $55 million for excellence in research funds. Yet, the governor simultaneously fought for and received $295 million for a new, unproven economic development fund that allows him to hand out financial incentives to businesses he is attempting to lure to Texas.

[…]

Knowing that it would further strain the ability of many students to pursue a college education, our short-sighted leaders forged ahead with their plan to deregulate tuition. Students holding jobs to pay for their college education will be required to work longer hours or take out additional student loans to cover the costs of unchecked tuition increases.

For example, tuition rates are set to rise by an average of approximately 12 percent this spring at the University of Texas System’s institutions. A student taking a 15-hour course load at the system’s flagship institution, the University of Texas at Austin, faces an even greater increase of 26 percent. By fall, the same student will pay 52 percent more for tuition than he did the previous year.

One major flaw of tuition deregulation is its affect on older students. Proponents of this policy failed to consider the fact that not every Texas university is a flagship and not evey student is a fresh-faced recent high school graduate. At the University of Houston at Victoria, for instance, the average attendee is 33. Increased costs are especially devastating to these nontraditional students who already have jobs, families and other responsibilities. Many cannot afford the extra burden.

Tuition deregulation also has serious consequences for two popular state programs, the Texas Guaranteed Tuition Plan and the Texas Grants Program. Parents and grandparents who were planning on securing a college education for their children and grandchildren by locking in tuition rates through the Texas Guaranteed Tuition Plan (formerly the Texas Tomorrow Fund) will no longer have that opportunity. Recent tuition spikes and uncertainty about future tuition costs have forced that program to close its doors to new enrollees.

Additionally, fewer Texas students will receive grants from the state to offset tuition costs. Without even taking into account the impact of deregulating tuition, the Texas Higher Education Coordinating Board already projects a 12 percent decline in Texas Grants recipients by 2005. Tuition hikes across the state will further diminish the number of new recipients.

Again, that was written in 2004. As is so often the case, we should have listened to Rep. Coleman. It took a decade longer than it should have, but we would be well advised to listen to him now.

Abbott puts on a moderate act

He cares about education!

I guess I need to find a new Abbott avatar

During a Capitol news conference in which he announced the selection of his senior staff, Gov.-elect Greg Abbott said Monday that education will be his top policy priority.

Abbott said he wants to improve the educational foundation that students receive in pre-kindergarten through fourth grade. “I want to ensure that all children finish the third grade reading and doing math at or above grade level,” he said.

He also said he wants to ensure that students are graduating from high school “and moving on to the next phase of their lives” — whether that is college or a career. For those seeking higher education, he said his administration intends to work toward making that goal more affordable. They also hope to elevate the status of the state’s public universities.

“One of the areas that disturbs me is the fact that five of the top 10 public universities in the country are from California, with none being from Texas,” Abbott said.

You’d think a guy that committed to improving education would have wanted to settle the school finance lawsuit so the Legislature would be compelled to adequately fund those improvements he says he’d like to achieve. As for the higher ed stuff, apparently a dislike of tuition deregulation is now the new hotness among some Republicans. We all remember that the reason why tuition was deregulated in the first place back in 2003 was so the Lege could cut higher ed funding, right? How much is Abbott willing to add to that to do something about this?

Also, too: He doesn’t have an ideological agenda!

The Republican governor-elect framed education as his top priority, pledging to boost pre-kindergarten programs, ensure high school students are prepared upon graduation and make college more affordable.

He also promised to use an expected budget surplus to put more manpower on the border and add $4 billion annually for roads, while reducing business and individual taxes, ending some regulations and restraining government growth.

He did not mention much-talked-about legislation to allow Texans to openly carry handguns, to further restrict abortion or to end in-state tuition for undocumented immigrants, among other high-profile ideas.

“Now, more than ever is a time for Texans to unite because we see increasingly that as Texas goes, so goes America,” said Abbott.

The 12-minute news conference, which included an unveiling of Abbott’s staff leadership team, eschewed both controversy and detail, instead sticking to many of themes emphasized during the campaign, said Mark Jones, a political scientist at Rice University.

“It was a good summary of a lot of the things that we heard him talk about on the campaign trail, especially during the general election,” Jones said. “He announced very much a general election policy agenda, and not a Republican primary agenda.”

How nice. But of course all those other Republicans that got elected last month did quite a bit of campaigning on Republican primary agendas, including our newest State Senator and of course our Lite Governor. The question – which was asked and generally dodged during the campaign – is what does Governor Abbott do when some piece of hot button legislation gets put on his desk? We all know that the answer is that he signs it – he’s already said as much for DREAM Act repeal. Everybody, including Mark Jones, knows this. Why pretend his genial little detail-free press conference means something it doesn’t?

What can you get for $10,000?

You can now get a college degree – at some colleges, in some programs, if you’re lucky.

Many were skeptical when Gov. Rick Perry last year challenged Texas public colleges and universities to offer degrees costing no more than $10,000.

Now 14 institutions have embraced the concept, which Perry sees as a promising way to rein in college costs and increase access.

Several schools began offering bargain degrees this fall, and others are scheduled to start programs next year, according to the Texas Higher Education Coordinating Board, a cheerleader for the concept.

“We’ve really been a bully pulpit to look at ways to bend the cost curve in terms of tuition and fees,” board spokesman Dominic Chavez said. “We articulate it as a challenge. Ten thousand dollars is a goal. Let’s see how many programs we can get for affordable pathways.”

In-state tuition and fees in Texas have increased by 90 percent in eight years.

The average cost was about $7,300 per year in 2011-12.

[…]

“Our concern is that the idea of the $10,000 degree is diverting attention from the very real conversation about rising costs that must happen among all the members of the higher-education community,” said Ann McGlashan, an associate professor of German and Russian at Baylor University and president of the Texas Conference of the American Association of University Professors.

Texas and other states have dramatically cut higher-education money over the years, forcing tuition up. Now political leaders want to put pressure on universities to reverse the trend while ignoring cost-cutting measures they have already taken, said Dan Hurley, director of state relations for the American Association of State Colleges and Universities.

“While we support the idea, the $10,000 mark is an artificially set figure,” Hurley said. “To deliver a college education at or below that mark is a little too elementary, given all the dynamics at play. It gets folks excited, but it’s not a sophisticated approach to encouraging system performance.”

[…]

Baylor’s McGlashan said students eligible for $10,000 degrees often have attended well-funded high-schools that offer many dual-credit and Advanced Placement classes that give them a head start.

“It also targets those who know very early on what they want to do with their lives,” she said.

“We need to be talking about the students who don’t have these advantages and what can be done to bring down costs for them. It’s time to put everything on the table and think outside the box.”

I have not paid close attention to this piece of policy from Rick Perry, partly because I don’t take policy ideas from him seriously, and partly because there’s only so many things I can pay close attention to at one time. If this becomes a viable option for a significant number of students, then I will give him credit for it, however grudgingly. I just want to point out that getting a degree at any of the flagship public universities in Texas used to be a pretty affordable proposition, back before tuition was deregulated by Perry and Tom Craddick and the rest of the Republican legislature in 2003, in response to the first budget crisis faced during Perry’s tenure. A Google search for “University of Texas tuition 2003” led me to this page, which told me that the Undergraduate Flat-Rate Tuition Fall 2002 / Spring 2003 (per semester) at UT was $2,357.00 for College of Liberal Arts, and $2,504.00 for College of Natural Sciences. That’s per semester, so you’d be looking at about $20K in tuition over four years, and of course there’s still room and board and books and transportation, all of which students in the $10K Degree program would need to pay for as well. In return you’d have gotten a degree in the program of your choice at UT, not too shabby a deal if you ask me. The reason in-state tuition has increased so much in the past eight years – that is, since tuition deregulation became the law of the land – is because eight years ago the state greatly scaled back its financial support for public universities, and gave those universities the burden and the freedom to make up the difference by charging more. Point being, if we’d never deregulated in the first place but instead continued the long tradition of supporting public higher education in Texas, we wouldn’t be having this conversation today. Let’s not lose sight of that.

Cutting TEXAS grants

Paying for college keeps getting harder for a lot of people in Texas.

Each year since 2003, the TEXAS grant program has had more applicants than it’s been able to help.

In 2009, lawmakers added $110 million to the program. But with an anticipated shortfall of up to $18 billion in the next two-year budget, total university financial aid could be up for as much as $108 million in cuts.

State Sen. Rodney Ellis, author of the legislation that created the TEXAS grant, said such cuts could turn back the clock on the gains the state has made over the past several years.

Under the proposed cuts, two out of every three eligible students who applied would not get the TEXAS grants. During the 2011-12 academic year, 56,000 community college and university students are expected to apply, and there would only be enough money for 18,700.

Most of the money will have to be devoted to maintaining help for students who have already been awarded two- or four-year grants.

“In our struggling economy, the last thing we need to be doing is setting up roadblocks for those seeking to obtain a postsecondary education,” said Ellis, D-Houston.

State Rep. Dan Branch, who chairs the House Higher Education subcommittee, said there are reasons to feel optimistic because of the Legislature’s demonstrated priority for financial aid.

“Ultimately, it’s not only an investment in human capital, it’s an economic development,” said Branch, R-Dallas. “The opportunity to break out and make a higher income ultimately brings in tax revenue.”

He said, however, that in the middle of a tough budget cycle, it’s hard to make promises or think of adding more monies to the program. Lawmakers have said they may limit scholarships to students with better academic records to save money during the upcoming session.

You can talk all you want about how good an investment this is, but if keeping Dan Patrick’s taxes low is a higher priority, then it’s all just talk. We could properly fund the TEXAS grants program, and many other programs, if we wanted to. Budget shortfall or not, we do what we choose to do. Part of the issue with the TEXAS grants is the same as the problem with the Texas Tomorrow Fund, which is that the decision made by the Lege and the Republican leadership in 2003 to deregulate tuition has made college that much more expensive. Whatever we decide to do next year, we’ll be feeling the effects long after that.

Interview with Rep. Scott Hochberg

Rep. Scott Hochberg

State Rep. Scott Hochberg, who represents HD137, is generally considered the Legislature’s leading expert on public education and school finance. He’s the Vice Chair of the House Public Education Committee, and he chairs the Appropriations Subcommittee on Education. With so many facets of public education in Texas being in the news lately, I thought I’d take advantage of this opportunity to ask him a bunch of questions about it:

Download the MP3 file

Normally, my interviews cover a broader range of topics, but in this case I feel like we could have spoken twice as long as we did and still not covered everything. Rep. Hochberg mentioned a couple of items in our conversation that I want to include here. First, he discussed the actual statute that directed the Texas Education Agency to create a growth metric for the schools. That’s Sec. 39.034 of the Education Code, entitled “MEASURE OF ANNUAL IMPROVEMENT IN STUDENT ACHIEVEMENT”, which I reprint beneath the fold. I think if you read it you’ll agree that the intent is pretty clear, and that the TEA is not following that intent. Second is this presentation to the Appropriations Subcommittee on Education by the Comptroller about the Texas Tomorrow Fund. See page 6 for the chart in question, which shows how the Texas Guaranteed Tuition Plan (TGTP) is going to be drained by 2018 as a result of tuition deregulation. Let me know if you have any questions about either of these.

As always, you can find a list of all interviews for this cycle on the 2010 Elections page.

UPDATE: The Quorum Report was kind enough to pick up on my interview and ask Rep. Hochberg a couple of questions of their own about it. See beneath the fold for the full story, which was sent to me by reporter Kimberly Reeves.

(more…)

Beware Lt. Govs. bearing gifts

On the surface, hearing that Lt. Gov. David Dewhurst now favors tuition re-regulation sounds like a good thing. A lot of people, Democrats especially, have been screaming about this for months. But as always, the devil is in the details.

Facing a major state budget shortfall in 2003, Dewhurst got behind a fiscal rescue package that triggered a 53 percent increase in tuition and fees at Texas universities.

But now Dewhurst and many legislators who favored that tuition “deregulation” bill believe it’s time to once again regulate the rates students and families pay.

“We just can’t afford to price out deserving young people going to college,” Dewhurst, Republican leader of the Texas Senate, told reporters. “I think there is so much built up pressure that there’s a likelihood that a bill will come out of the Senate putting some cap (on tuition).”

Dewhurst said a consensus is building in the Legislature to limit tuition increases, but a method is still being worked out. He said discussions have included a two-year moratorium on hikes, limiting increases to 5 percent a year or tying rising tuition to inflation.

[…]

While the idea of college affordability has broad appeal among lawmakers, some warn it could spark potentially devastating cuts at universities and reduce the value of a degree from Texas public colleges. Opponents of regulating tuition say the state shouldn’t force universities to lower tuition without offsetting the resulting loss in revenue.

Dewhurst did not spell out how much state funding he envisioned for higher education. However, he warned that with a declining economy, there would not be as much money available as in 2005 and 2007 sessions.

The reason that tuition was deregulated in 2003 was so that the public universities could get by with less state funding. They made up for that shortfall by jacking up the cost to the students. If their ability to set tuition rates is then capped – as I believe it should be – they need a commensurate increase in state funds, or else it’s the worst of both worlds. I want to see costs under control for students and their families, but what we have now would be better than re-regulated tuition with the same funding levels as before. Let’s not fall for a trap here.