A tuition freeze without more state aid could leave Texas universities strapped

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When Jason Tomlinson presented a proposed tuition increase to the board of regents at Texas Woman's University earlier this month, he stated the obvious:

“No one likes a tuition increase,” the vice president for finance at the TWU System told board members.

But then he presented regents slides that made the pitch: A tuition hike would ease a decline in the amount the state has put toward operating expenses since 2010.

There are so many demands on the state budget, he said, that it’s difficult to expect the lawmakers to continue investing at the same rate.

“It shows you what we're sort of facing,” he said.

The board unanimously approved the tuition increase.

Not a week later, the system had to reverse that decision after Gov. Greg Abbott sent a letter to university system leadership declaring that he would not support any undergraduate tuition increase for the next two years, an extension of the current policy.

“Texans face significant rising costs due to inflation,” Abbott wrote. “When inflation and other economic pressures burden household budgets, our public universities must take every step possible to ease the financial burden on our students and their families.”

But without additional funding from the Legislature, Abbott’s desire to freeze tuition at public universities for another two years could create a tight budget situation for many of them, especially regional institutions that rely more on tuition revenue compared to flagship campuses. That’s because they have smaller budgets and endowments, fewer research grants and fewer deep-pocketed donors to make massive gifts. Faculty and higher education experts say they’re worried the state won’t step up to make up the difference.

“It is essential that if a state calls for a tuition freeze that they fully fund the freeze,” said Tom Harnisch, vice president for government relations at the State Higher Education Executive Officers Association, a national membership group of state higher ed leaders.

“Universities, just like other consumers, have to deal with inflationary costs: the need to increase faculty and staff salaries, rising benefits costs, maintenance, infrastructure, and energy (costs), and ensuring robust student services,” he added.

It’s unclear if more funding will be allocated to public universities during the upcoming legislative session. Abbott’s office did not respond to questions about whether he’d push lawmakers to do so.

The idea to freeze tuition in 2023 originally came from the university systems.

Prior to the start of that year’s legislative session, leaders from the state’s major university systems sent a letter to the leaders of the state House and Senate asking for $1 billion more in general-revenue funding to cover costs for university employee health insurance and the program that gives free college tuition to military veterans and their children. In exchange, they proposed, universities would keep tuition flat for two years. Ultimately, lawmakers gave universities an additional $700 million in exchange for flat tuition.

Two years later, university leaders have been largely silent about Abbott’s most recent letter. But many university systems, including Texas Woman’s University, were preparing to consider a tuition increase. Since Abbott’s letter was sent out, the Texas Tech University System and the University of Houston System quietly pulled agenda items at their November board meetings to discuss potential tuition increases.

A University of Texas System spokesperson said they would adopt tuition rates in alignment with the governor’s directive. A Texas A&M University System spokesperson shared similar sentiments. In 2024, in-state tuition at the University of Texas at Austin is about $10,900 per academic year, while at Texas A&M, it is about $11,500, according to the Texas Higher Education Coordinating Board.

While all universities rely on tuition revenue to operate, the extent to which schools depend on it can vary based on the size and type of school. At UT-Austin, just 18% of the budget comes from tuition and fees. That compares to 30% at Texas Tech University in Lubbock, according to state data.

At 11 public universities across the state, more than one-third of their operating revenues come from tuition, including Tarleton State University in Stephenville and Stephen F. Austin State University in Nacogdoches.

The reliance on tuition is the highest at some large regional universities, such as the University of Texas at Arlington, the University of Texas at Dallas and University of North Texas. At least 40% of their operating budgets comes from tuition, according to the most recent data from the Texas Higher Education Coordinating Board.

In a statement, Jason Smith, vice chancellor for governmental relations at the University of Houston System, said he commended the governor for ensuring Texans can afford a college education.

“As the state expects to again have tens of billions in surplus revenue, we will work with the legislature this session to ensure they make additional investment in our universities to keep up with enrollment growth and the costs associated with supporting student success,” he said.

More than one-third of operating revenues come from tuition at three of the four UH system universities.

A freeze without adequate funding could cause universities to search hard for places to cut: reducing classes and increasing class size, limiting faculty or staff raises or cost-of-living increases, program cuts and reduction to student services, Harnisch said.

Baker said when budgets are tight, schools usually rely more on adjunct faculty to cover classes rather than hiring full-time faculty because they are cheaper. Usually, she said, tuition freezes don’t keep costs down forever.

“Typically we see when the freeze lets up, the amount of increase is really large because it's making up for lost time,” she said.

Often, regional universities take a bigger hit when budgets are reduced, too.

“The flagship universities get a cold, and the regionals get pneumonia,” said Harnisch.

Regional public universities also have less access to other funding streams, like income from endowments, gifts, research grants and contracts. And they receive less state funding, said Denisa Gandara, an associate professor at UT-Austin who studies higher education finance and policy.

Flat tuition could make it harder for universities to keep up with rising costs. And for a student, Gandara said, a tuition freeze could be a double-edged sword.

“While a tuition freeze can make college more affordable for students — not a guarantee because it depends on how much aid colleges offer — a tuition freeze may also reduce the funding available for colleges to support student success,” Gandara said in an email.

While universities are appreciative of the extra funding boost last session, some are still struggling to balance their budgets. The University of Houston - Victoria saw formula funding drop by $3 million in the last biennium at the same time enrollment declines meant they saw a $1.5 million decrease in tuition revenue. This spring, the school laid off 15% of staff to balance its budget.

A continued tuition freeze without additional support from the state means the school will continue to see fewer state funds than the previous year.

Even the flagship universities have seen an impact from the tuition freeze over the past two years.

Texas A&M University President Mark Welsh told The Texas Tribune that the current tuition freeze has contributed to the university’s inability to hire more faculty to teach enough course sections in the university’s rapidly growing science and engineering departments, prompting the university to increase class sizes.

“We've done a great job of keeping up with the student growth, but we've done it because of the great and increased level of effort by our faculty and our staff,” he said. ”And that can't be where we leave the burden over time, or we will affect the quality of education.” A little more than one-third of revenue — 35% — at Texas A&M comes from tuition, according to system documents.

Meanwhile, some conservative-leaning policy groups applauded Abbott’s decision to maintain the tuition freeze as a first step toward addressing affordability.

Politically, both the Texas Republican and Democratic parties have expressed support for improving college affordability through a tuition freeze. But experts say a tuition freeze is low-hanging fruit.

“It is a lot easier to deal with college affordability by telling people not to charge over a certain amount than it is to rework what an affordable college means and how someone can affordably get a bachelor's degree,” said Dominique Baker, professor of education and public policy at The University of Delaware.

State policy experts on both sides of the political aisle point to the state’s decision more than two decades ago to deregulate tuition as a major catalyst for the affordability crisis today. Deregulation allowed boards of regents to set their own tuition rates, shifting the power away from the state Legislature who had previously set tuition rates.

“In effect, the state has relinquished its role in making higher education affordable, leaving students vulnerable to the financial pressures imposed by institutions that may not always prioritize cost-effective education,” wrote the policy analysts at Texas Policy Research, a conservative leaning policy organization.

Zeph Capo, president of the Texas chapter of the American Federation of Teachers, said in a statement that deregulating tuition was a mistake with “disastrous consequences for many Texas families and students.”

“Without that conversation and a willingness for the state to put more of its money where its mouth is for the long-term future, I’m left to wonder if the state’s priority is truly helping working-class families afford higher education or simply trying to salvage the prestige of the very higher education institutions it is laser-focused on undermining," he said.

The Texas Tribune and the Fort Worth Report partner with Open Campus on higher education coverage.

Disclosure: Texas A&M University, Texas Tech University, Texas Tech University System, Texas Woman's University - Board of Regents, Texas A&M University System, University of Texas - Arlington, University of Texas - Dallas, University of Texas at Austin, University of Texas System, University of Houston and University of North Texas have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.