Mark G. Yudof, THE UNIVERSITY OF TEXAS SYSTEM
Friday, December 22, 2006
Since we continue to read alarmist stories about rising tuition and the affordability of a UT System education, we hope you will permit us to offer a few facts regarding tuition at University of Texas institutions.
We work hard to keep the cost of education as low as possible. In fact, total revenue per student adjusted for inflation has remained relatively flat. Between 2002 and 2005, revenues per student increased by just $229 — from $12,728 to $12,957 — or 1.8%. The actual cost of producing a semester credit hour is not out of control; we are not seeing annual double-digit increases, as in the case of health care.
But the price charged to students has risen significantly. Like state legislatures across the country, the Texas Legislature is confronted with competing priorities amid rising costs for many vital services including public schools and health and human services. As a consequence, over the past four years, state support for UT academic institutions has been fairly consistent, but enrollment growth and inflation have eroded the share of costs the state covers. And it is fair to say that students have made up most of the difference. In round figures, the state share of funding has gone down $1,000 per student and tuition has gone up $900.
Though students and their families are picking up more of the tab, a college education at a UT institution remains affordable. About half of our undergraduate students receive financial aid. As has been the case in every tuition-setting process, we set aside funds for student financial aid — more than the 20 percent required by law. Many students of moderate means will pay little or none of their tuition increases. The average student gets more than a 30 percent discount from the sticker price.
Professor Bridget Terry Long of the Harvard Graduate School of Education describes what she calls the "list" tuition price — as it appears in college catalogs — and the "net" tuition price — the average price actually paid by students once scholastic grants are factored in. She invokes College Board figures to show that from 1996-97 to 2006-07, at public four-year colleges across the nation, the average list price (tuition and fees) increased 49 percent, but net price increased only 29 percent. That certainly reflects our experience in Texas. And it reflects general trends in inflation.
To help students and their families calculate the net price, we established www.texascollegemoney.org, which allows Texans to determine costs, find available financial assistance and seek additional financial aid counseling.
With the advent of tuition flexibility, we have been able to establish incentives for students to graduate in a timely fashion. Our campuses are using innovative approaches such as flat-rate tuition, tuition rebates, discounted tuition for courses offered at off-peak hours and guaranteed tuition rates for a set period of time to encourage students to take more credits each semester and graduate within four years.
Graduating on time saves students far more than they pay in tuition increases. Taking longer to get a degree costs students and their families in two ways: extra tuition and the opportunity cost of not moving into the work force.
Besides, UT institutions are still great values. According to the federal Department of Education, among the 10 most populous states, the total price of attendance and tuition and fees at Texas four-year public institutions continues to rank among the lowest. And all UT System academic institutions have tuition levels well below the average for top-tier public institutions in the 10 most populous states. UT-Austin ranks 7th out of the 10.
Finally, a college education is still the best investment for students and for Texas. College graduates in the United States earn nearly twice as much as their peers with only a high school diploma. Even if students must borrow to attend, as graduates their higher income makes their loans easier to repay.
Education, like all investments, should be evaluated on the basis of anticipated return. By that standard, it's a solid investment for everyone.
Yudof is chancellor of The University of Texas System.