Free Tuition is a Rational Plan

Students Sold Down the River this Summer

By Kathy Mitchell and David Barker
September 1991; Pages 4, 19; Volume 3, No. 1

This summer a strange coalition of administrators, elected officials and students agreed that tuition must go up in order to save higher education in Texas. While they wrangled over the details, almost no one admitted that to a large extent, tuition is a strawman in the budget debate - meant to deflect criticism from the University's budget priorities.

According to the University's financial statements, tuition accounts for a mere seven percent of revenues, less than the system brings in from "professional fees" or sales of medical and other services.

"Tuition today is primarily a mechanism for supplementing our income. It doesn't amount to a big fraction of it, as you know," says Hans Mark. "The academic budget of UT Austin is probably $550 million, and we 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."

The Tuition Consensus

The summer's higher-education debate ignored these numbers in favor of a consistent argument that students should pay for what they get (although no one mentioned the corollary that students should control what they pay for), like customers in a grocery store. A proposal released in April by former Lt. Governor Bill Hobby and a former Chairman of the UT Board of Regents, Jess Hay, was substantially similar to a Texas Higher Education Coordinating Board proposal released the following month. Both proposals recommended increasing tuition to 25 percent of the direct cost of education, direct cost meaning general revenue appropriations from the state plus tuition revenue. The proposals would have put tuition at $32 per semester credit hour (SCH), an increase of 78 percent over the current $18 SCH.

In addition, the Coordinating Board recommended that the percentage of tuition diverted for financial aid be increased from the current 15 percent to 20 percent to offset the effects of the tuition increase on accessibility to higher education for poor students.

"Tuition today is primarily a mechanism for supplementing our income. It doesn't amount to a big fraction of it," said Mark.

In July the State Comptroller John Sharp released his Texas Performance Review, an audit of Texas agencies and funding. Sharp's proposals for higher education recommended increasing tuition to 25 percent of direct plus indirect costs of education. The indirect costs of education include appropriations from the state into faculty and staff retirement programs, and would have raised resident tuition to $40 SCH in 1993, a 120 percent increase over current tuition levels. Sharp also recommended increasing the set-aside rate for financial aid to 20 percent.

Disappearing Student Money

Student bureaucrats from A&M, Texas Tech, UT Dallas and UT Austin all supported tuition hikes, although they wanted smaller increases than Sharp's proposal. Most of their counterparts at other schools opposed any increase. UT-Austin's so-called student leaders wanted to "negotiate" a "moderate" increase over the statutory increases already in place. In 1985, as a result of massive student protest against proposals to quadruple tuition, the legislature made a pact that it would only raise tuition by $2 every two years until 1996. This year, UT's student apologists made no effort to enforce this agreement.

The Junior Lobby

In June, the SA at UT Austin coordinated a meeting of students from around the state, the Texas Student Conference, to determine appropriate action on tuition proposals. The meeting generated two position statements that reflected fundamental disagreements among the delegates.

On July 22, The Daily Texan reported that SA President Garth Davis called for no tuition increase; but in the same article, a confused Davis also suggested that the increase should follow the Hobby/Hay plan - $32 per hour phased in over time, or 175 percent of the current rates. The UT delegation at the Conference frequently expressed their willingness to accept tuition increases and emphasized the need to "negotiate" with the legislature and administrators about where the increased revenues should be spent.

There were some notable exceptions to this defeatist philosophy and they came, interestingly enough, from representatives of junior colleges and smaller universities. Hans Mark told Polemicist that, "In some of our schools, tuition is already too high and so if we raise tuition even a little, say at UT El Paso or at UT Pan American, people would drop out. When we raised tuition five years ago from $4 to $12 we lost a thousand students at UT El Paso." Students from smaller campuses almost universally fought for zero increases.

Students from the big UT schools and other large institutions in the state ("prestige" schools) had clearly wilted in the onslaught of budget proposals from "experts." This feeble response to wildly draconian proposals bodes ill for the future hopes of students in Texas as a whole.

The World According to Garth

In particular, Garth Davis inadvertantly reinforced the Governor's student bashing with inept remarks about poor students and their cars. The Governor enraged students and their financially strapped parents early in the budget debate with her flippant statement (repeated twice) that students all drive BMWs and could therefore afford to pay higher tuition. Garth responded at one point that he did indeed drive a BMW but felt guilty about it, and later, "just because students drive nice cars doesn't mean they can afford tuition."

Garth later complicated his view of student life, declaring that "[h]igher education is very important for people in the slums, in the ghettos. They're stuck down there unless they can get a higher education.'

Coordinating Board Chairman Reasoner agreed, pointing out that "those people desperately need to be educated if they are going to enter the mainstream of our society, and it's an immense bargain to provide them an education rather than have to deal with them in our correctional system later in life." (One wonders why Davis and Reasoner belong to the same fraternity.)

According to Hans Mark the majority of UT-System students rely on some form of financial aid, although probably few of these are scrambling desperately out of the ghettos and prisons to attend UT. These shallow theories careen about in the vacuous minds of these philistines, who never once sought out the hard data needed to diagnose the effects of tuition hikes on students.

Privately, some student leaders acknowledged that their concern had shifted from tuition toward funding for higher education.

The Apology Shifts

While UT student bureaucrats failed to defend themselves (or us) against tuition hikes, they apparently had no trouble defending the UT System in the face of budget cuts. Once they found themselves rubbing shoulders in the Capitol with the legislative elite, our student advocates quickly abandoned the tuition fight to lobby for the administration. As noted in a story in the Austin American-Statesman: "Privately, some student leaders acknowledged that in recent days, their concern has shifted away from tuition and toward funding for higher education."

Playing into the interests of the UT administration, the Texas Student Conference devoted an entire policy statement to the need to increase higher-education funding. The remainder of the recommendations propose ways to implement tuition increases. With lobbyists like this, why should UT pay a full-time staffer?

Student leaders should not be lobbying for more funding in higher education. Despite the state law forbidding state agencies to pay lobbyists, every state school in Texas has highly paid administrators to do this job. While the UT-Austin SA President lobbied the legislation for more money to help out his administrator heroes, those administrators were lobbying for dramatic increases in tuition rates.

The University, despite pious statements about "access" to higher education, in reality wants to educate fewer students.

The Attack on Students

If tuition is only a fraction of the University's budget, why all the fuss? Why not give all students a free education - and thus encourage broader participation in the education system? The system would save itself the massive costs of administering financial aid, while encouraging enrollment.

The University, despite pious statements about "access" to higher education, in reality wants to educate fewer students. UT Austin has held enrollment steady throughout the 80s, despite skyrocketing budgets, largely spent on capital for high-tech research. Now, according to UT's official Strategic Plan, it would like to reduce the student body by 1,600 to 48,000. Further, the Administration has targeted undergraduate enrollment for deeper cuts. The Strategic Plan proposes to bring the graduate student population up to 25 percent of the total, from about 10,000 to 12,000. This means that cuts in the undergraduate population would reach 3,600 students.

Administrators, official student functionaries and legislators all agree that a shrinking student body must pay ever higher rates, despite Comptroller Sharp's explicit admission that student currently get less rather than more for their tuition dollars.

According to boosters of higher tuition, college education in Texas is a "bargain." Among the states, Texas ranked last in average tuition and fees charges for resident undergraduates in 1990-91. At the same time, however, Texas ranks dead last in state appropriations per student to higher education and Texas students already ranked 7th in the proportion of operating budgets that their tuition and fees made up in 1989-90.

While proponents of higher tuition expressed concern over financial aid, the proposed increases in Pell Grant income and state financial aid funds failed to cover the real cost increases for needy students. Sharp states that for every $1 increase in tuition, federal Pell Grant increases would offset 60 cents, leaving another 40 cents for the student to pay.

Further, Sharp grossly exaggerates this 60-cent estimate. According to Patricia Harris, Director of Student Financial Services at UT Austin, 43 percent of Pell Grant recipients at UT Austin already receive the maximum level of support, and would not see any more Pell Grant money with a tuition increase. Harris believes that the actual return in Pell Grant aid for a $1 increase in tuition would be closer to 20-30 cents.

In addition, while all players in the tuition consensus piously endorsed putting more money into the Texas Public Educational Grant Program, Harris notes that TPEG accounted for only 3 percent of total aid to students at UT Austin. Texas' contribution to student financial aid is tiny.

Currently, students at UT Austin are unable to find the financial aid they need. Financial aid officers have an average case load of 1,300 applicants. This overload will be increased be 2,500 new applicants in the coming year. Given the complexity of the aid application process, such excessive case loads constrict student access to education, says Harris. According to the official Financial Statement for UT Austin, August 1990, administration spending for Scholarships and Fellowships dropped from $76.8 million in 1989 to $73.9 in 1990. Higher tuition and lower financial-aid spending will certainly help the University in its stated goal to reduce its enrollment of undergraduate students.

No Victories Here

Was the "moderate" tuition increase that finally passed a victory for students? Exactly the contrary, for three very potent reasons. First, the higher education "experts" managed to convince the legislature to break the tuition contract they made with students in 1985. The contract would have guided gradual tuition increases until 1996. Second, financial aid officers and Coordinating Board officials point out that unmet financial-aid needs persist even now, and that any increase in tuition and fees will further damage access. No one monitors unmet need statewide. Finally, the response of official student leaders demonstrates that we cannot expect any opposition from the SA or the Texas Student Lobby.

The proposals of the higher education lackeys neglect the hard data that demonstrates the effects of their tuition increases on access. But such data are available. According to calculations carried out by Patricia Harris at Student Financial Services, UT Austin, an increase from $20 to $40 per credit hour would generate an increase in student need of $10.14 million. Harris predicts an additional $1.53 million in Pell Grants, and state financial aid funds avaiable of $6.212 million.

Disappearing Student Money

Adding the new available aid funds and subtracting from th need leaves almost $2.4 million in unmet need at UT Austin alone. Had Sharp and the Coordinating Board gathered and presented data such as thesem they clearly could not have justified the massive increases in tuition they proposed, while still preaching access.

Rather, the tuition proposals reflect a change in the philosophy of higher education finance in Texas epitomized by the first sentence of John Sharp's proposal to increase tuition: "Education, is a bargain, at least in Texas." In other words, it is no longer a right, but a commodity, which students may buy at more or less a market rate. Sharp even notes that students receive government subsidies to purchase this commodity. "Resident undergraduate students have been receiving a highly subsidized education due to low tuition charges," Sharp says. Yet he applauds the public subsidies provided to industry by the University system in the form of capital improvements and research.

This has not been the philosophy behind Texas higher education finance until recent years. Traditionally, Texas has seen higher education as an investment in its own welfare and future. To maximize its return on that investment, the benefits must be available to each individual showing promise of ability though low cost or free tuition. Traditionally tuitions have been low in the western and midwestern states; higher education until recently has been free in California. Tuition is also low, or often free, in most European countries - for example, students at Oxford pay zero tuition.

Students can fight for access to low tuition, but only with organization can we succeed. We propose that students form a Task Force on Tuition that could act as a repository, coordinator, and disseminator of data, bearing on tuition and financial aid issues, solicited from groups such as student governments and state agencies.

The Task Force should seek a broad view of higher education in Texas encompassing all forms of institutions present in the state and forge links between students in diverse institutions on the tuition and aid issue. We stress that such a structure will only be effective if it is located organizationally outside higher education institutions themselves. We believe that such a Task Force could, within the next two years, acquire data which would make it the most informed entity in the state on issues of tuition and financial aid. No existing student organization is at present capable of, or willing to, act with any strength on this issue, and yet tuition increases will clearly continue to be the most persistent and threatening force affecting students in this state.