William H. McRaven, Chancellor

Dear Friend,

This month I’d like to share some thoughts on a topic that’s of both interest and importance to all the constituencies of the UT System. That topic is tuition, and more broadly, what we’re doing to ensure that every qualified student in Texas has access to an education that is both affordable and high quality.

As many of you know, the level of financial support our institutions have received from the state has declined rather dramatically in recent years. Just to illustrate, 30 years ago state appropriations funded 47 percent, or nearly half, of UT Austin’s budget. Today the state funds 12 percent, or about an eighth. To be fair, state funding is not the only issue. The cost of delivering higher education has also increased significantly over this period. Things like students services, information technology and health care take a bigger chunk out of university budgets than ever before. We do all we can to control and reduce our costs through group purchasing and sharing services. But in the end the math is simple, if not pretty: as the state’s share of financing has declined, the portion that must come from students and their families has increased.

In 2003, the state was facing a fiscal crisis, and after setting tuition rates for many years, the Texas Legislature passed a law that effectively deregulated tuition. Schools and university systems like ours were suddenly able to set tuition independent of the Legislature – and, in the first few years that followed, there were some large tuition increases. However, in recent years, tuition inflation has moderated significantly. Over the past four years, tuition has increased by only 2.3 percent overall at seven of the nine UT System academic institutions. At UT Austin and UT Arlington, there have been no tuition increases for four years. And last May, the Board of Regents froze in-state tuition at all of our academic campuses.

We are bucking the national trend and I’m proud to say the schools of the UT System are among the most affordable in the nation. However, tuition continues to be the main source of revenue for our institutions and we need to ensure we are not disadvantaging our students and the quality of their education by under-funding their needs.

We recognize that even relatively affordable tuition and fees place a financial burden on many families – and, tragically, put higher education out of reach for some.  Our duty, to those families and to the great state of Texas, is to continue finding new, innovative ways to deliver a high-quality education that is as affordable as possible. That’s exactly what we intend to do – and in fact, the Regents have already taken some important steps to that end.

Guaranteed tuition is an example of a tool we’re using to help keep college affordable. In 2013, the Texas Legislature mandated that public universities begin offering guaranteed tuition plans. The new law was actually modeled on what the UT System had already put in place at UT Dallas and UT El Paso using the flexibility of deregulated tuition. At the time the law was passed, the Regents had already voted to require guaranteed tuition plans at all UT academic institutions.

We are moving on multiple fronts to control tuition and fees. But in my view, focusing exclusively on the absolute cost of a UT System education misses half the point. We want students, parents, and really all our constituencies to view time spent at one of our institutions as an investment – and like any investment, the upfront costs need to be weighed against the expected returns. That’s why we developed seekUT, an online tool that offers data on the salaries and debt loads of UT System alumni by major. seekUT is giving students a realistic look at what their debt-to-income ratio is likely to be five and ten years down the road, enabling them to make better-informed decisions about their education and plan for their financial future.

With seekUT, there should be less guessing and less stressing, as students better understand the returns they can expect from the time and money they are investing in their education. But while a UT System education is, in my view, not only a smart investment but a great bargain, that doesn’t mean we shouldn’t try to control student debt as much as possible. To me, the smartest, most effective thing we can do to reduce our students’ debt burden is to increase our four-year graduation rates. Common sense tells us that earning a degree in five years is going to cost you roughly 25 percent more than earning it in four. Imagine the uproar if any UT System school increased tuition by 25 percent! But the effect is the same.

I won’t sugarcoat the fact that UT institutions’ four-year graduation rates are too low, across the board. Getting a better understanding of what’s driving that problem and what we can do to fix it is one of my top priorities as Chancellor.

You can expect to hear more from me about this topic in the months to come. In the meantime, thank you for all you do for the UT System, our institutions, and especially our students, upon whose shoulders the future of Texas rests.

With sincerest gratitude and appreciation,

William H. McRaven, Signature

Bill McRaven


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One-on-One blog with Chancellor Bill McRaven

 

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