Senate Higher Education Testimony: College students in Texas are being crushed by a ‘hidden tax’ and set-asides are to blame.

Senate Higher Education Testimony: College students in Texas are being crushed by a ‘hidden tax’ and set-asides are to blame.

On August 23, 2016 TCCRI submitted written testimony before the Senate Higher Education Committee regarding college tuition set-asides and how students who receive none of the benefits bear the resulting costs.

Tuition Set-Asides 

There are two types of tuition paid by students at Texas public universities. The first—statutory tuition—is set by the legislature, currently at $50 per credit hour. As a result of tuition deregulation in 2003, universities may charge their own tuition—designated tuition—above and beyond the statutory amount set by the legislature.Tuition set-asides require that a portion of each Texas resident student’s tuition be “set aside” in order to help fund state financial aid programs for other students—typically economically disadvantaged students.

More specifically, the Education Code requires each institution of higher education to “set aside not less than 20 percent of any amount of tuition charged to a resident undergraduate student under Section 54.0513 in excess of $46 per semester credit hour.” For graduate students, the set-side is “not less than 15 percent of any amount of tuition charged to a resident student enrolled in a graduate or professional degree program under Section 54.0513 in excess of $46 per semester credit hour.” Institutions required to set aside a portion of tuition are required to provide students with a notice informing them that a portion of their tuition is being set aside in order to provide financial assistance to other students. Such a notice must include the specific amount being set-aside. For example, the following is a copy of a set-aside notification received by a full-time student in UT-Austin’s College of Natural Sciences at the beginning of the spring 2016 semester:

Dear Student, 

The University is required by State law (Sec. 56.014, Education Code) to 

send this informational notice each semester. A portion of each student’s 

tuition must be set aside for need-based financial assistance to qualifying 

students. $314 of your Spring 2016 tuition was set aside for this 

purpose

This message is for informational purposes only. No action or response 

is required. 

Student Accounts Receivable

The University of Texas at Austin 

fbic@austin.utexas.edu

Set-asides are also in place for students at two-year institutions of higher education. For students at public community or junior colleges, including the Texas State Technical College System, the set-aside falls between 3 percent and 20 percent depending on resident status and a number of other factors. These set-asides specifically fund the Texas Public Education Grant program, which provides grants to students who can demonstrate financial need, and each institution is authorized to implement its own criteria for making that determination.

 

Click here to read the entire testimony.