Lt. Gov. Dan Patrick has an idea to lower college costs across the board: get rid of what’s called “tuition set-asides” for students who need financial help. Generations of Texans have benefited from the financial aid program, but Patrick calls them a hidden tax that unfairly burdens the middle class.
Yesterday, lawmakers began exploring the merits and demerits of Lt. Gov. Patrick’s plan, but reporters David McSwane and Lauren McGaughy of the Dallas Morning News have crunched some numbers of their own.
McSwane tells the Standard that tuition set-asides are state-mandated earmarks to fund financial aid for poorer students – the first pool of money was created in the late 1970s. “In 2003, as lawmakers decided they wanted to fund higher education less – they divested – they put another mechanism in place to help poor students,” he says.
Last fiscal year, set-asides totaled $345 million in aid and if the program is cut, students who benefits from the set-asides would lose about $3,450 a year on average. McSwane says other students subsidize this form of financial aid by paying $686 a year in fees to fund the program. Patrick says he’d like to eliminate the program altogether to lower tuition for all students, but McSwane said their research shows that would have an outsize impact on poor students.
“We found, in looking at the state’s data, that plan would produce modest savings for wealthier students – about 7 percent, or $482 a year on average,” he says, “while poorer and middle-income students who benefit from this financial aid would lose about $3,600 a year.”
At least 30,000 students from extremely poor families – those earning less than $10,000 a year – would lose “about half of their tuition,” McSwane says.
“It would make [paying for college] very difficult for some of these families,” he says.
If the state does away with the program and doesn’t provide additional funding, many low-income students won’t be able to go to college. Yet Patrick has criticized set-asides for years, calling them a “hidden tax” on middle-class families.
“[Patrick says] they’ve got really high tuition, tuition’s only going up,” he says, “and they have to pay this extra few hundred bucks to subsidize other students.”
McSwane says the push to eliminate set-asides isn’t related to universities’ budgets at all.
“It does not affect the budget in any way,” he says. “Students pay into the pot of money. That money is then redistributed for tuition for poorer students. It’s an issue because the Lieutenant Governor, as leader of the Senate, has said this is something he cares about and he’s going to give priority to any bill that cuts tuition set-asides.”
Post by Hannah McBride.