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UT's tuition pledge lauded as 'huge relief'

Program will fully cover tuition for undergrads with household incomes of up to $65,000

Chase Karacostas,Melissa B. Taboada
ckaracostas@statesman.com
Graduates walk to their seats during the University of Texas campuswide commencement ceremony May 25. The university is expanding a financial aid program that will fully pay tuition for about a fifth of its undergraduate students. [NICK WAGNER/AMERICAN-STATESMAN]

Throughout his senior year of high school, Levi Perez worked two jobs — one at a golf course and another at an auto shop warehouse — trying to put away enough money to pay for college.

He did so while simultaneously studying to earn his associate degree through Austin Community College and get his high school diploma from Manor Early College High School. Perez, 18, chalked up the juggling act as “the way of life” for low-income students like him.

But Tuesday’s news that the University of Texas will offer free tuition for more than a fifth of undergraduate students starting in 2020 was welcomed as “a huge relief” for the incoming junior.

“It really is a huge thing for a lot of students … knowing we are secure in following our dream,” said Perez, who will be able to benefit from the tuition relief during his last year of college, ensuring he can get his degree in film. “We don’t have to completely kill ourselves over how to get the money.”

The tuition break comes as part of an expansion to its Texas Advance Commitment program, which currently offers full tuition for students with annual household incomes of less than $30,000 with support available for those making up to $100,000. Now, UT-Austin will cover tuition fully for students with household incomes of up to $65,000 and will provide some assured assistance for those making up to $125,000.

READ MORE: Attend UT for free? After Tuesday vote, 21% of undergrads could

The financial aid will come from interest generated by a $166 million chunk of the UT System’s $31 billion endowment that was set aside exclusively to support low- to mid-income students. Its annual payout of just under 5% will give the school about $8 million to pay for the program.

“We know that every year there are very high achieving students from all around the state who don't feel that they can afford to leave their region to go to college or don't feel they can afford to go to the college of their choice,” UT spokesman J.B. Bird said. 

Scott Kelley, UT System’s executive vice chancellor for business affairs, said the money to expand the program came because of how the endowment has grown in the last 10 years, with a surplus return of 8% almost every single year after subtracting inflation and the 5% pulled each time for yearly expenses.

“Like everyone, we are concerned about the affordability of higher education and particularly for students of families that are making less who will find it more challenging to go to college,” Kelley said. “We feel like this takes a big step in helping students realize that dream of getting a UT-Austin education and make sure it's affordable for high achieving students all over the state.”

The money only benefits UT-Austin, however, because rules surrounding the Permanent University Fund, the largest section of the University of Texas System’s endowment, bar it from being used for any capital improvement projects outside of the main campus.

UT-Austin student Zachary Henry already meets the current Texas Advance Commitment requirements, but said this week's announcement made him feel a lot more secure about being able to pay for his last year of school. In April, he nearly lost $5,000 of financial aid and spent weeks fighting to keep it.

“This is just fantastic, but I’m really interested to see how this could go further,” Henry said. “There’s still a lot of financial insecurity. Even though I got this scholarship restored for myself, I have been working nearly 30 hours a week this summer so that I can be able to eat next year.”

His single mother’s income keeps his family hovering close to the federal poverty line, so he doesn’t have much flexibility when it comes to paying for school. And when the radio-television-film senior graduates, he said, he’ll still have nearly $40,000 in student loans, a “daunting” burden he isn't sure how he’ll pay for.

Henry said tuition is only “half the battle” since many of his loans are for books and living expenses.

“The Austin area is so expensive, and you also have to be able to feed yourself,” he said. “So how can you expect students whose parents are not even making enough to make ends meet to then come up with that other money?”

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Low-income students, many of whom are first-generation college attendees, have long faced challenges in paying for higher education. The boost to UT's tuition assistance program could be the aid many students need to earn college degrees and has the potential to break generational cycles of poverty.

“This is a game changer for a lot of our students,” said Samantha Kanzler, a Manor Early College High School teacher who assists students with college applications and patching together financial aid and scholarships. “Our students rely almost exclusively on financial aid to be able to go to college. A lot of them make the decision on which college to go to based on if they have a full ride somewhere else. So they will leave the state if they can go to college and it’s covered.”

Norma Cantu, a UT professor who specializes in higher education, said what stood out most to her was the transparency with which the Board of Regents presented the program. Too often, she said, financial aid programs turn increasingly confusing amid the mix of scholarships, grants and loans from a college, a state, the federal government and third-party organizations.

One issue Cantu said many people face is the use of terms like “award” to describe loans, which are anything but a gift.

“Usually financial aid is so difficult to grasp because they don't give you a clear message,” she said. The Texas Advance Commitment program “has that common appeal that UT is not hiding behind any jargon or pedantic language. … Being transparent about what aid is available builds trust for the state institutions.”

Bird said making how to get financial aid clearer is one of their main priorities.

“We're trying to cut through the confusion and send a very clear simple message of our commitment to students,” he said. "One of the most exciting things here is to say clearly, ‘Look, don't worry about all the details here. If you're within that adjusted gross income level, we are committing to make sure we cover the full cost of tuition.’”

UT, however, is far from being the only college to start and then expand this type of program. Rice University and the University of Houston have their respective “Rice Investment” and “Cougar Promise” initiatives.

ALSO READ: UT boosts financial aid for low- and middle-income students

Rice’s initiative is also an expansion of an existing program and covers tuition for students with annual household incomes of less than $125,000 with aid for incomes up to families making up to $200,000. Houston’s program covers tuition for those with household incomes under $50,000.

“We do think this is where in some form or other a lot of higher education is going to go,” Rice University President David Leebron said. “We thought it was valuable for us to set the pace and be a leader here.”

Leebron said they are already seeing some benefits from the program.

“We also saw a very large increase in our applications this year,” he said. “This is clearly something people were looking for.”

Texas A&M and Texas Tech preceded them all, though, running free tuition programs for middle- to low-income families for over a decade.

A&M’s “Aggie Assurance” program covers tuition fully — though not fees — for those making less than $60,000.

UT might be behind the trend, but Stephanie Gomez said she was thrilled to hear about the university's financial aid expansion. The program will cover her third and fourth years of tuition and ensure that her little sister, who is 11, can attend some day.

“It's a huge weight off my shoulders knowing that my third and fourth year aren't going to be such a heavy burden on myself. Yeah, there's the cost of rent and books, but that's it,” said Gomez, a public relations sophomore. “You know you take small steps, and we celebrate them.”

Editor's note: This story has been updated to correctly identify Scott Kelley, UT System’s executive vice chancellor for business affairs, and to correct the classification of incoming junior Levi Perez.