First, the press release:
STOP TEXAS SET ASIDES
PRESS RELEASE
For Immediate Release: July 14, 2010 Contact: Shawn Johnson, (713) 454-9849
Texas Higher-Ed Students Face Ambition Tax
HOUSTON – In 2003, the Texas Legislature passed HB 3015 which deregulated tuition and required all public universities to set aside a certain percentage of every student’s tuition each semester to fund needs-based financial assistance programs for Texas residents.
This means that a Texas student paying $2,500 per semester in tuition will have $500 of their tuition set aside each semester for financial assistance programs under HB 3015. Students are obligated to pay into the fund even if they themselves receive some kind of financial aid. Over four years, the student will pay $4,000 into this program – a substantial amount considering that many students pay for college through student loans, requiring interest payments. In fact, if the student financed all of their tuition they would owe an additional $550 in interest on the tuition that was set asides for another student.
Tuition deregulation created two parts to tuition: statutory and designated.
Statutory tuition is the rate that the state mandates colleges to charge, and is the same for all public higher education institutions. It is currently $50 per semester hour for in-state students and $327 for out-of-state students. 15{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} of graduate and undergraduate statutory tuition is set aside and reserved for the Texas Public Educational Grant and Emergency Tuition and Fee Loans.
Designated tuition is determined by each institution. According to the Texas Education Code, there is no limit on how much designated tuition can be charged. Universities are required to set aside 15{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} of graduate and undergraduate designated tuition that exceeds of $46 per semester credit hour, and finances needs-based financial assistance programs selected at the discretion of each university. In the 2008-09 term $100 million in tuition was set aside from students for this purpose.
An additional 5{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} is set aside from undergraduate designated tuition to fund the Texas B-On-Time Loan Program. Set asides collected for this program go to the Texas Higher Education Coordinating Board, which controls the program. Although the B-On-Time program awards loans to both private and public institutions, only public institutions are required to set aside students’ tuition. This creates an unfair burden for students attending public institutions by forcing them to share the bill for other students attending private institutions.
Since 2003, tuition rates have increased 86{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986}. As the costs associated with higher education have continued to rise, more students and families are struggling to pay for college and must find additional funding sources to meet the growing costs. Yet many of these same students are unaware that a significant portion of their tuition is used to provide financial assistance to other students.
Not all students benefiting from tuition set aside programs are legal Texas residents. In 2001 HB 1403 enacted a loophole for non-legal Texas residents allowing students seeking financial aid that are non-U.S. citizens, who are ineligible to apply for federal student aid, to meet the Texas state residency requirements and can complete the Texas Application for State Financial Aid (TASFA) in lieu of the FAFSA form. These students can then compete for state funds without being U.S. Citizens or legal U.S. residents and makes them eligible for financial aid programs including the Texas Public Education Grant, the Texas Grant, and Texas State Exemption Programs.
Students of Texas universities graduate with the 4th largest amount of average debt after obtaining a four-year degree in the country. Texas Commissioner of Higher Education, Raymund Paredes, says that the average Texas student graduates with about $20,000 in student loans- a figure he said has roughly doubled in the last decade.
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Stop Texas Set Asides is an organization of current and former Texas college students who were shocked to find out that 20{997ab4c1e65fa660c64e6dfea23d436a73c89d6254ad3ae72f887cf583448986} of our college tuition had been “set aside”, without our knowledge, to fund another’s education. Stop Texas Set Asides is working to inform college students across the state of Texas about this hidden tax on education and put this practice to an end.
Attached to this email is Stop Texas Set Asides’ detailed study into HB 3015 tuition set asides. For questions or request that attachments be sent in another format, contact Shawn Johnson at (713) 454-9849.
Rorschach’s response and commentary on the B-on-Time program:
Shawn, it is actually a bit worse than that. The B-on-Time program further penalizes students that are enrolled in programs that take more than four years to complete such as most engineering programs. So if I were to take a modern art program or a western lit program I could be in and out in under four years and have my student loans forgiven, but then spend my entire working life waiting tables because my degree is essentially worthless. But if I were to take mechanical engineering I would have to pay back ALL of my loans, have to pay extra tuition/books/fees/room/board for the fifth year, but I would be pretty much assured of a long and profitable career. So if you are smart and can do calculus you have to pay the whole bill, but if you are dumb and can’t hack a real degree program your bills are paid. Which begs the question why such degree programs with very little application in the real world are even offered or at least limited to a few slots per year. Does the world really need a couple thousand art majors every year? Or wymyn’s studies majors? (and where are all the men’s studies majors eh?) I mean fer crying out loud, if they haven’t figured out their gender by now, I’d say they ain’t gonna get there. Do our universities have so much extra money and room that we can waste time money and resources just so somebody can throw paint at a piece of canvas or pee in a mason jar with a cross in it and call it art? Do we REALLY need to offer degrees in that crap? My NINE year old can do that and she didn’t have to go to college to do it!
The B-on-time program further penalizes people who are attempting to go back to college to get a degree while continuing to work. These people are not goof-off professional students that go to class when they feel like it and go to class then just to keep the gravy train from their folks rolling, these are people who have more often than not topped out in their pay scale in their current field and need a higher degree to move on. But they can RARELY afford to go to class full time. So because they have a family to feed and a mortgage to pay, they have to pay their student loans in full? How is that at all fair? These people are usually VERY motivated to finish just as fast as possible, so why must they be penalized for their economic situation?
You can find more of Rorschach’s higher education commentary in this post. His blog is at Red Ink Texas.
More information on the set asides can be found here: Stop Texas Set Asides!