Student Interest in Fixed-Rate Tuition Varies

This fall semester, for the first time, all public universities in Texas were required to offer incoming students the option of a payment plan that fixed their tuition at a particular rate for four years, alleviating the uncertainty of variable annual increases.

The measure sought to address concerns that tuition was rising too fast and graduation rates were not rising enough. Fewer than a third of the state’s public university students graduate in four years, and the statewide average of tuition and fees at public universities in Texas has jumped more than 75 percent in the past decade.

While some schools have made fixed-rate tuition mandatory, at campuses where it is optional, student interest has proved mixed. The number of first-time students choosing the new plans ranges from zero at some universities to nearly 4,000 at the University of North Texas. 

“We’ve been in a climate where the price of higher education has been going up,” said state Rep. Dan Branch, R-Dallas, who wrote the bill mandating the new price plans. “We’re all looking for various things to slow that down or flatten it out. This is one tool that has been successful in providing certainty.”

The University of Texas at Dallas has put all students on a mandatory fixed-rate plan since 2007. This year, the Texas A&M University System shifted all of its campuses to a similar model. 

Under such a plan, first-year students tend to pay more than their counterparts on the traditional track. The shift to a fixed-rate plan at the A&M System campuses came with a 6 percent increase.

Diana Natalicio, the president of University of Texas at El Paso, which has offered a rarely chosen fixed-rate plan since 2006, said that frontloading significantly dampens interest among students who are unsure of their finances. 

“One could argue they should be more long range in their thinking,” she said of the university’s students, “but if you’re playing at the edge financially, you pay as you go.”

She also noted that tuition increases appear to be slowing, possibly mitigating the benefits of fixed tuition. This year, for example, the University of Texas System kept tuition flat at all of its academic campuses.

At the University of Texas at Austin, Crystal Huang, a freshman, said she opted not to participate in the fixed-tuition plan. 

“I thought I could save money through the fixed tuition, but it turns out you can’t actually,” Huang said.

Students who enroll in UT-Austin’s fixed plan are eligible for up to $3,500 in rebates if they graduate in four years, but the school’s website cautions that “there is no guarantee that students will realize any tuition savings by electing to participate.”

Still, the new option has been popular at some institutions.

At the University of North Texas, about half of the current freshmen signed up for the school’s new Eagle Express Tuition Plan, which locks in tuition for four years and offers students a rebate of up to $4,000 if they graduate on time.

Neal Smatresk, the university’s president, said it also encourages the institution to be more proactive about helping students complete their degrees.

“It not only changes students’ expectations about when they’ll graduate,” he said, “it changes our expectations about getting students graduated.”

Disclosure: The University of North Texas, the University of Texas at Austin, the University of Texas at El Paso and the Texas A&M University System are corporate sponsors of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.