Board of Regents approves proposal to raise tuition, blames lack of state funding

Students can expect to pay more for tuition now that the University of Houston System Board of Regents approved a rate increase for fiscal years 2017 and 2018 in its Thursday afternoon meeting.

The board considered two increases to the undergraduate and graduate tuition rates — 2 percent for 2017 and 2.2 percent for 2018 — bringing the average undergraduate tuition to about $5,435 per semester in 2017.

The undergraduate tuition rate will rise to $5,336 in 2017 from $5,231 in 2016. It will rise to $5,453 in 2018.

In his presentation to the board, Interim Vice Chancellor for Administration and Finance Jim McShan explained the hike in tuition was necessary to hire additional faculty, support enrollment growth and new academic programs, increase financial aid and enhance academic infrastructure.

Universities across the nation are making similar increases in tuition, including other state schools.

Now, students are covering the cost of funding for higher education more than the state. At UH, McShan said that state funding makes up only 24 percent of the budget. In 1984, it covered 64 percent.

Texas Permanent University Fund

During the presentation, chairman Tillman J. Fertitta said UH is essentially at a disadvantage. He alluded to an article the Houston Chronicle published yesterday that stated if the board approved the increase in rates, “students would pay about $200 more per semester at UH than at UT.”

Fertitta said this claim was inaccurate due to the disproportionate amount of money UT and Texas A&M University receive through the Permanent University Fund, a rich state-owned investment fund that sends hundreds of millions of dollars exclusively to the two universities’ systems.

“How do they even compare us when you’re trying to compare tuition between us and the University of Texas and A&M and saying that we could be higher when we are starting off at zero (and) they have PUF funds?” Fertitta said.

UT and Texas A&M may supplement their budgets with PUF money. According to a UT Board of Regents agenda, in 2014 they used PUF money “in lieu of an in-state tuition increase for undergraduate students at the academic institutions.”

“It seems to me, in my seven years on this board — the PUF fund seems to be the most misunderstood number in the state of Texas,” Fertitta said. “One school gets, I think, it’s almost $500 million, and the other one $250 million, but when everyone is trying to compare statistics, nobody wants to do it. It’s like we are starting six touchdowns behind.”

McShan said they made the presentation available to the public so that anyone could do the math and find out exactly where the increases would go.

“Let’s look at the actual state resources each university is receiving, then let’s talk about what it’s costing to put a student through school,” McShan said.

Tuition options

UH offers two tuition options: fixed tuition, which locks in one price for four years to students who are enrolled in it, and variable tuition, which can change on a year to year basis.

Current students enrolled in the fixed tuition plan will not be affected by the board’s approval to increase tuition. Anyone not enrolled in fixed tuition will have to pay the new price — including incoming freshmen and incoming transfer students.

An incoming fall 2016 freshman or transfer student who enrolls in the fixed tuition plan will be locked into $5,336 for four years. With the board’s ruling on Thursday, anyone not in a fixed tuition plan will see another price bump the following year.

As of 2015, a student taking 15 credit hours at a fixed tuition pays $4,855, according to the UH website, but one using a varied tuition rate pays $5,325.

Across the nation, most universities base their tuition packages on a 15 credit hour rate, while UH bases it on a varied 12 credit hour rate. UT Austin and Texas A&M are among these universities, though their system campuses might not be.

UH’s demographic of working students and transfers makes the 15 credit hour concept irrational. McShan said 35 percent of the student body takes 12 or 13 semester hours.

“We looked at it, and we just thought this provides our students that can’t take, due to their situations, 15 hours, an option that is more affordable,” McShan said. “So we are not penalizing them for only being able to take 12 hours.”

Despite the board’s complaint that state funding places UH at an unfair disadvantage, the tuition increases will make UH the second-most expensive state school in Texas, according to Texas Higher Education Coordinating Board data.

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