Texas Institutions Take A Bite Out Of Student Debt

While a bill to cap state tuition languishes in the legislature, two Texas institutions are taking a bite out of student debt.

By Brenda SalinasFebruary 26, 2015 10:40 am

In 2003, The Texas Legislature voted to allow public universities to set their own tuition. Since then, tuition has more than doubled and student debt in Texas has skyrocketed.

State Senator Charles Schwertner filed a bill to cap tuition and fees at the state’s public colleges and universities at their current levels. Under the bill they would only be allowed to grow at the rate of inflation. But this bill hasn’t yet come to a vote, and there’s no indication of whether that will happen.

Lauren Asher with the Project on Student Debt says that Texas is doing relatively well compared to the rest of the nation.

“Texas had lower than average than debt compared to the national, it had the 32nd highest and was 28th for the share of students with loans,” Asher says.

But one of the reasons why student debt is relatively low is because Texas has a higher share of students who graduate from community colleges, which tend to be much cheaper. Among students who go to 4 year colleges, debt is still a big problem. Texas is among the top states with the highest default rate on federal student loans.

Right now a lot of students rely on Federal Pell Grants, which are about $5 thousand dollars a year. But when you add in not just tuition but housing, food and books, that just makes a dent in what it costs to go to college.

Which is why two Texas institutions are tackling student debt in their own ways. Memorial Herman, one of the biggest hospital systems in Texas, made an announcement saying that on July 1st they’ll start paying off their employee’s student loans. Ann Hollingsworth is an HR executive there.

”We’ve long had a tuition reimbursement program for people who are currently going to school but we didn’t have anything for people who had gone through school and finished who were struggling with debt,” Hollingsworth says. “We thought, well what can we do to help the people that have just graduated who won’t be going to school anymore, but who are still paying for their education.”

The healthcare field is so competitive in Houston that it just might catch on. But there’s another novel idea in the works. Michael Sorrell is the president of Paul Quinn College, an HBCU south of Dallas. The small liberal arts college is now becoming a work college to make school more affordable for students.

“Being a work college means that every student that lives on campus is required to have a job, probably the simplest way to explain is work study on steroids,” Sorrell says.

Students can perform any job on campus, from administrative positions to groundskeeping. Sorrell says that by basically having students run the school they’ll dramatically cut costs. Between Pell Grants and scholarships, he’s vowing that no student will graduate with more than $10,000 in debt. That’s less than half the state average. 

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