HB 3015 (Morrison/Shapiro) Relating to the tuition and fees charged to students of institutions of higher education, to financial assistance funded by tuition, and to reports of availability and access by institutions of higher education.
Background
Texas is among a minority of states in which the Legislature retains power of the administration of the basic undergraduate tuition rate. More common among the states are procedures under which governing boards have authority to set tuition. The current system tends to diminish the extent to which market forces are involved in the setting of tuition rates, and it standardizes the basic rate across the state regardless of the individual needs of university campuses. With control over tuition, Texas university governing boards would be able to use flexible rates as a means to achieve strategic goals such as improved graduation rates, better use of facilities, and improved academic programs.
Key Elements
- Give university governing boards authority to set all tuition and fees.
- Allow governing boards to adopt flexible rates that respond to needs at various campuses rather than having one statewide rate.
Advantages of Local Control of Tuition
- Allow tuition to be set according to local conditions and needs, as well as market forces.
- Provide a source of enhanced revenue to:
- Increase the side and quality of faculty and staff in high-demand programs;
- Boost academic quality by paying for advanced equipment and technologies as well as specialized library materials;
- Provide enhanced support for programs that are relatively expensive to operate or that are in the highest demand;
- Strengthen the quality of services provided to students.
- Adopt flexible tuition rates (including selected discounted rates) that vary among campuses, academic programs, classes offered at different times, and various types of courses (traditional, inter-session, or online).
- Use tuition rates as a mechanism for enrollment management, encouraging students to take higher course loads and complete degrees more quickly. This would result in more efficient use of facilities and other resources, allowing more students to be educated per year.
How Political and Market Realities Would Serve as a Monitor on Governing Boards
In projecting the implementation of tuition deregulation, Chancellor Yudof has made the following observations:
“Actions taken by a governing board on tuition policy would be considered in the context of the state’s primary goal of expanding educational opportunities. Care would be taken not to price students out of these opportunities, and to make sure that adequate financial assistance is available. Other factors that would be taken into account include student input, market conditions, and the imperative to be accountable to the Legislature and the public.”
Evidence of this careful approach to the administration of tuition policy is found in the experience of the U.T. System with the “designated tuition” and graduate tuition authority that has already been delegated to governing boards. Although the Board of Regents has the authority to set designated tuition as high as $44 per semester credit hour in the 2002-2003 academic year at the nine U.T. System general academic campuses, that maximum is currently levied at only four of the campuses. Graduate tuition rates also vary among institutions and programs.
Resolution
HB 3015 significantly alters higher education tuition policy in Texas. With tuition flexibility, universities will now be able to use flexible rates as a means to achieve strategic goals, such as improved graduation rates, better use of facilities, and improved academic programs. To that end, governing boards may charge any student designated tuition in any amount necessary for the effective operation of the institution and they may set variable tuition rates for programs and course levels.
For the U.T. System institutions, decisions regarding tuition will be made through a broad process of consultation with students, faculty, and administrators. Each campus president will conduct consultations as part of the process of developing tuition proposals to be brought to the U.T. System and the Board of Regents. The U.T. System will also form a System-wide commission on tuition and fees, including student representation, to help coordinate policy and facilitate an exchange of ideas and information. A tuition working group will conduct a continuing assessment of best practices and strategic uses of tuition.
As a condition of tuition deregulation, the legislature has established that institutions make satisfactory progress towards “Closing the Gaps” and that each institution must meet acceptable performance criteria in graduation rates, retention rates, enrollment growth, educational quality, minority participation, and in other areas.
The Legislative Oversight Committee on Higher Education has been created to monitor the implementation of tuition deregulation. The Oversight Committee will consist of 12 members (six representatives selected by the Speaker and six senators selected by the Lieutenant Governor) who will monitor tuition deregulation and make legislative recommendations to ensure that legislative intent is fulfilled.
HB 3015 establishes financial aid programs for resident undergraduate, graduate, and professional students. The law will require that a minimum 20% of the increase in designated tuition collected from Texas residents above the current $46 per semester credit hour be set aside for resident undergraduate students and 15% of the increase collected from resident graduate and professional students be set aside from resident graduate and professional students. These set asides must be used for grants, scholarships, work-study, student loan, and student load repayment assistance programs for eligible resident undergraduate, graduate, and professional students.
The Legislature will also require institutions to report information on affordability and access to their governing boards. The Coordinating Board is required to establish the form, in consultation with institutions, which the institutions must use to make their reports. The reports must include information on income requirements to attend an institution, and admissions and financial assistance award criteria for applicants. The report must include a demographic analysis and is to be presented to each governing board by November 1 of each year.
HB 3015 also addresses reservations the Comptroller of Public Accounts expressed over the Texas Tomorrow Fund. The Texas Tomorrow Fund authorizes a pre-paid tuition and fee program for Texas families. The law that becomes effective on September 1, 2003 will now provide that universities must accept as payment in full the lesser amount of either tuition and required fees charged by the institution or an amount equal to the weighted average of tuition and required fees of all public senior colleges and universities. This effectively means that an institution must absorb any cost differential between the actual cost of tuition and required fees and the amount paid for by the Texas Tomorrow Fund.
