Scrapping a state requirement that forces colleges to provide financial aid to lower-income students at the expense of other families is a top priority of Lt. Gov. Dan Patrick and other top Texas Republicans in the legislative session that starts in January.

Sen. Kel Seliger, an Amarillo Republican who heads the Senate's higher education committee, said he plans to introduce legislation to end the so-called tuition set-aside program that requires public universities to divert some tuition dollars to help low-income students. In the 2015 fiscal year, colleges gave nearly 209,000 students some $345 million in grants. Statewide, students from higher-income families paid an average of about $680 more to attend college to cover those grants.

Seliger said he favors letting universities decide how much tuition money they want to use for financial aid. And he wants to allocate more state-sponsored grants for needy students, such as the existing Texas Grant program.

In November, Patrick named eliminating tuition set-asides as one of his top legislative priorities for 2017. He spoke out against high college costs and tuition set-asides in April.

More Information Texas universities financial aid disbursements in 2015 from tuition set-aside program Texas A&M University: $35.05 million University of Texas at Austin: $34.35 million University of Houston: $21.66 million Texas Southern University: $6.08 million

Read More

He and other opponents say the practice unfairly burdens students paying higher tuition bills as the overall expense of going to college keeps increasing. Advocates say the grants help low- and middle-income students graduate and then contribute to the workforce.

The set-aside program began in 2003 when Texas lawmakers deregulated tuition rates. While colleges were allowed to set their own tuition rates for the first time, the law required 15 percent of subsequent tuition increases to be set aside for financial aid, a condition lawmakers hoped would keep college affordable. Average in-state tuition at Texas' four-year universities, however, has soared since then from $3,361 to $8,669 a year.

Additionally, a 1975 law requires universities to earmark 15 percent of the first $50 per semester credit hour they charge for financial aid.

'Serious issue'

Texas Higher Education Commissioner Raymund Paredes said earlier this month that eliminating tuition set-asides without replacing the grants in some form would prevent some lower-income students, including many students of color, from having the chance to earn a college degree.

The cost of college is a "serious issue," he said. "We need some sort of (replacement) plan."

University leaders and lawmakers have placed the blame on one another for escalating tuition. College officials say they have to charge more to keep up with increasing operating costs and more stringent mandates with smaller state appropriations. Lawmakers counter that institutions need to increase efficiencies and trim their operating budgets rather than increasing prices.

Rep. Donna Howard, an Austin Democrat who is vice chair of the House higher education committee, said committee members largely agree that any set-aside aid cut would need to be replaced.

And she said she's not convinced the state has the money in its budget to do that.

"I'm not saying it couldn't be done, but there are going to be many competing issues," she said, adding that she expects Democrats in the House committee to protest attempts to eliminate tuition set-asides.

Seliger wants to discuss linking the ability of universities to boost tuition to performance indicators such as graduation rates. And he has not decided if he'll propose doing away with both set-aside programs.

Benefit, burden

Tom Melecki, an Austin-based college affordability consultant who worked for a decade in the University of Texas at Austin's financial aid office, said cutting set-asides would affect both low-income students who also qualify for Pell Grants and Texas Grants as well as students technically from middle-income families who still need help paying for college.

"Even students from fairly middle-class homes need some kind of financial aid in order to cover the total cost of attending Texas public universities," Melecki said.

In August, the Senate's higher education committee heard more than an hour of testimony detailing the tuition set-aside program.

Then, Paredes acknowledged that the extra costs charged to certain tuition-paying families are a burden.

"The question is," he said, "does the benefit outweigh the cost and the burden to all students?"

Some senators were skeptical.

Sen. Charles Perry, a Lubbock Republican, said the practice unfairly "squeezed" middle-class families who end up paying for part of other students' education, even though they can't qualify for federal loan programs that assist the poorest families.

Austin Sen. Kirk Watson, a Democrat, countered during the summer hearing that the set-aside program would need to be replaced with some other way to help those students who need to work while going to college. He said he had "absolutely zero" faith the Legislature would add $345 million to the state budget for need-based financial aid to offset the elimination of the set-aside program.

'Short memories'

In a recent interview, Watson said the program is maintaining affordable college costs for students who can't afford to pay full tuition.

"Nobody didn't believe that tuition wasn't going to go up," he said, referring to the 2003 law that allowed the state's universities to set tuition prices. "We have short memories in this building."