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How to get answers to your questions about:
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Frequently Asked Questions About Tuition and Financial Aid
(click on chapter headings below for a quick link to the answers)
1. Tuition and the Value of Education What is a college education worth today? What does tuition pay for? What is the difference between tuition and fees? What part of the overall UT budget is tuition? Does tuition pay for all of the costs of education? How much does the State contribute to UT's overall budget? What is UT System doing to make its campuses more cost-efficient? Have you cut your expenses? What is UT System doing to make itself more accountable to the public, parents, and the Legislature? How do we know you are spending it wisely and getting good results? Why can't more money be solicited from donors/alumni than to raise tuition? Why can't money from the Permanent University Fund be used to reduce tuition? What benefit will students gain from paying additional tuition?
2. Tuition: How Does UT Compare? How does UT's tuition compare to other states' public universities? Why is tuition rising nationally at rates higher than the Consumer Price Index? What is the net average cost per semester?
What is flat-rate tuition? Will these plans promote more timely graduation? What is the "B-on-Time" program for college students?
4. Access & Affordability: Financial Aid What are the requirements of the new tuition flexibility law for tuition set-asides for financial assistance? What kinds of financial aid are available? How much do UT academic students receive in financial aid (non-loan) each year? Are there tax benefits for the families of students enrolled in college? How do I find financial assistance for my child's education? How can I reduce the financial demands of a college education? What resources are available for financial aid? What is the difference between subsidized vs. unsubsidized loans? What is a Stafford Loan? What is the TEXAS Grant program? Who qualifies? What are Pell Grants? Who qualifies? What other options are available? How do I find out more about financial aid? How do I apply for financial aid?
1. Tuition and the Value of Education
What is a college education worth today? A bachelor's degree results in $1 million more in lifetime earnings than a high school diploma alone. A professional degree is worth more than $3 million more in lifetime earnings. Every dollar a family invests in education realizes an 18.7% return. See the U.S. Census Bureau for more information.
What does tuition pay for? What is the difference between tuition and fees? Tuition helps pay the salaries of faculty, advisers, and other staff, and
provides operational support. Currently, tuition makes up 10% of System-wide
revenues.
What part of the overall UT budget is tuition? System-wide, tuition accounts for only 10% of the total UT System budget. Other sources of funds include state tax dollars; federal, state, and private-sector grants; and donations. Last fiscal year the UT System raised $488 million in donations from the private sector.
Does tuition pay for all of the costs of education? Higher education is a very labor-intensive operation. Of the total UT System expenditures, nearly 60 percent is for personnel costs, which includes the salaries and benefits for the 88,000 staff and faculty that support our 15 institutions.
How much does the State of Texas contribute to UT's overall budget? State tax dollars (General Revenue) account for only 20% of the total UT System budget. The 2004 budget reflects a 6% cut in General Revenue appropriations from the previous year.
What is UT System doing to make its campuses more cost-efficient? Have expenses been cut? In February 2003, the UT System identified significant budget cuts as part of the state's need to reduce spending from state appropriations for the current fiscal year by 7%.
As a first step in the process of making the overall 7% reductions, the System instructed its 15 campuses on Jan. 28 to institute a hiring freeze. In addition to reducing the number of employees through attrition, some campuses laid off employees to cut costs. Other measures that institutions used to achieve budget reductions included:
What is the UT System doing to be more accountable to the public, parents, and the Legislature? In 2002 the UT System developed an Accountability program to measure the effectiveness of its institutions. This system will monitor progress across the whole spectrum of higher education functions - teaching, research, and health care; services to communities; and organizational efficiency and productivity. This program expands on and improves long-standing accountability procedures that include numerous state and federal reports, an extensive auditing program, and one of the nation's most advanced programs for ensuring compliance with all applicable laws and regulations.
Why can't more money be solicited from alumni and other donors so tuition won't have to be raised? The UT System raised almost $500 million from donors, including alumni, last year. Much of those funds are designated for capital expenses and special programs, not the operating budget. All UT System campuses operate extensive fund-raising programs, but dontations alone are not sufficient to meet operational needs.
Why can't money from the Permanent University Fund be used to reduce tuition? The Texas Constitution limits how the $13 billion Permanent University Fund, an endowment for the UT System and A&M University System, can be utilized. Income from PUF is placed in a fund called the Available University Fund. The Constitution provides that this money can be used to help finance capital projects (such as construction of buildings) and to help support academic excellence at UT Austin, Texas A&M University at College Station, and Prairie View A&M University. Without the resources of the PUF, tuition might have to be higher than it is, but the PUF is not large enough to replace tuition entirely.
What benefit will students gain from increases intuition? Tuition increases will help ensure that universities can attract and retain superior faculty and staff to provide the best education experience possible for students, and sustain the excellence of education at UT campuses and assure it for future generations. Tuition increases will help pay for additional professors, increased course offerings, improved facilities, and debt service on buildings. A "cheaper" education is not always a bargain.
2. Tuition: How Does UT Compare?
How does UT's tuition compare to tuition at other states' public universities? UT Austin currently ranks slightly above the University of North Carolina at Chapel Hill, but well below all of its other peer institutions across the country. (UCLA, Michigan, UC Berkeley, Washington, Ohio State, Indiana University, Illinois, Minnesota, and others.) Other UT campuses are consistently below most of their peer institutions. >Comparison of major universities
Why is tuition rising nationally at rates higher than the Consumer Price Index? Higher education is more dependent on labor costs than is the economy in general. Since the 1980s, the proportion of state budgets going to the support of higher education has been declining. In Texas, tax dollars (General Revenue) account for only 20% of the total UT System budget. State appropriations were cut 6% across the UT System for the 2003-2005 budget period. Tuition revenue is needed to help make up for these cuts. See budget graphic.
What is the net average cost of tuition and fees per semester for UT students? The net average cost per semester varies from campus to campus. See graphic for detailed answer.
3. Tuition Plan Alternatives
What is flat-rate tuition? One of the biggest increases nationwide in the cost of going to college results from students not graduating within four years. Every additional year means more expense to the family and, more importantly, the lost opportunity of getting a paying job in the marketplace. The UT System endorses the view that students can control their costs by taking more credits and graduating sooner. We have put muscle into that philosophy, as have many other universities, by introducing flat-rate tuition. Students pay a flat sum of money, and the more credits they take, the lower their cost per credit.
Will the UT System's approach to tuition rates promote more timely graduation? Yes, through flat tuition and other cost incentives, as well as increased work study opportunities and increased financial aid, more timely graduation will be promoted.
What is the "B-on-Time" program for college students? The 78th Texas Legislature established the Texas "B-on-Time" Student Loan Program, a zero-interest educational loan with provisions for forgiveness of the debt if the student graduates on time with at least a B-average. The Texas Higher Education Coordinating Board expects to begin making loans under the program in spring 2004. These loan awards will be retroactive to fall 2003.
The Coordinating Board is in the process of clarifying details related to funding, priorities, and student eligibility.
4. Access & Affordability: Financial Aid
What are the requirements of the new tuition flexibility law for tuition set-asides for financial assistance? 20% of tuition increases approved by the Board of Regents will be set aside for financial aid grants. Of this 20%, 5% goes to the Texas Higher Education Coordinating Board for a new, forgivable loan program called the "B-on-Time" program.
The UT System is committed to tuition policies that enable low- and middle-income families to afford a high quality education for their sons and daughters.
What kinds of financial aid are available? The federal government provides about 70 percent of the student financial aid available across the country.
How much do UT academic students receive in financial aid each year? UT undergraduate students were awarded nearly $630 million from federal, state, and private-sector sources for grants, scholarships, loans, and work-study programs last year. That's $141 million than tuition and fees collected. (FY 2003)
Total Financial Aid Awarded (by campus) UT Arlington - $79 million UT Austin - $215 million UT Brownsville - $35 million UT Dallas - $46 million UT El Paso - $60 million UT Pan American - $66 million UT Permian Basin - $11 million UT San Antonio - $101 million UT Tyler - $16 million TOTAL - $630 million
See more complete details by campus here.
Are there tax benefits for the families of students enrolled in college? Yes, there are tax deductions and tax credits. The Hope Scholarship Credit and the Lifetime Learning Credit tax credits were the largest federal initiative since the GI Bill, and in 2000 $4.9 billion was returned to taxpayers to offset college expenses. Over half of that sum went to families with incomes between $30,000 and $75,000. Taxpayers making between $50,000 and $74,999 received an average tax credit, not a deduction, of $902. See the IRS for more information.
How do I find financial assistance for my child's education? There are many federal, state, local, and private sources of financial aid. Some are merit-based (based on a student's academic record or other activities), some are need-based (based on a family's income). Financial aid can include grants and scholarships or loans and work-study. The resources available are different for each university, so it is important to speak with the UT Financial Aid Office at the universities you are considering.
How can I reduce the financial demands of a college education? Encourage your children to take more credits per semester and to graduate on time. Each additional semester spent in school beyond a traditional four years results in additional living expense and additional time out of the job market, or extends the time away from graduate and professional schools. In addition, learn about all the types of financial aid that are available and take advantage of these programs. Every college and university offers free financial aid counseling.
What resources are available for financial aid? Following is a list of some resources that may be available to you:
What is a Stafford Loan? With the Federal Unsubsidized Stafford Loan, you have the option either to pay the interest during in-school periods, or to let it accumulate (accrue) and be added to your loan amount (capitalize) when you begin repayment after you are out of school. Borrow as little as possible overall, and only when necessary to meet your costs, from these more expensive loan programs.
What is the difference between subsidized and unsubsidized loans? If you are awarded a subsidized loan, the federal government pays the interest
charged during periods of at least half-time enrollment, as well as during
the six months after you cease to be enrolled at least half-time (graduation,
withdrawal).
What is the TEXAS Grant program? Who qualifies? The TEXAS Grant program provides a grant for eligible students to attend public and private nonprofit institutions of higher education in Texas. A qualified student will be a Texas resident with financial need and an expected family contribution of no more than $8,500 who has applied for any available financial aid or assistance and has not been previously granted a baccalaureate degree. Students must enroll at least three-quarter time in an undergraduate degree or certificate program at a Texas non-profit college or university.
What are Pell Grants? Who qualifies? Federal Pell Grants generally are awarded to families making less than $40,000. A Pell Grant, unlike a loan, does not have to be repaid. Generally, Pell Grants are awarded only to undergraduate students who have not earned a bachelor's or professional degree. (A professional degree is usually earned after earning a bachelor's degree in a field such as medicine, law, or dentistry.) In some cases, you might receive a Pell Grant for attending a post-baccalaureate teacher certificate program. Click here for more information.
What other options are available?
How do I find out more about financial aid? Almost everyone qualifies for some form(s) of financial aid. Here are some sites that will help you find out about resources.
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