Texas has experienced an 86% increase in tuition rates since 2003. A closer inspection on tuition set aside practices reveals that these tuition set asides may represent a significant catalyst for these drastic cost increases. To illustrate this theory, consider an undergraduate student at Texas A&M University:

  • The student will pay $2,5681 in tuition per semester (15 hour semester)
  • Over four years, the student will pay $20,545 in tuition of which $2,718 will have been set aside for needy students.
  • Having borrowed $20,545 for tuition, the student will make $28,3722 in cumulative payments ($540 in interest on the loan principle that was set aside for other’s).
So the student will have to pay an additional $3,258 to obtain their four-year degree due to the set aside tuition and interest on set aside portion of the student loan.
In 2003, the student would have paid only $1,380 in tuition for the same 15 hour semester. This means that tuition has increased $1,188 at Texas A&M University since 2003. Of this $1,188 increase in tuition since 2003, $513 (43%) is a result of the tuition set aside practice.