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Eleven years after the state of Texas deregulated tuition at its public universities, soaring tuition bills have both university and state officials rethinking the more autonomy/less public money proposition.

University officials are asking the state of Texas for more money and legislators in both political parties are calling for the state to once again take control of tuition. That experience could be a cautionary tale for Wisconsin.

Gov. Scott Walker’s proposal last week to cut UW System funding by $300 million over two years and, in exchange, allow it to set tuition without state oversight already has university officials predicting layoffs. Meanwhile, legislative leaders are warning of unbridled tuition hikes after a possible two-year freeze and suggesting that simply changing who sets tuition won’t change the underlying need for public support for the university.

In Texas, where tuition rose 104 percent (unadjusted for inflation) between deregulation in 2003 and 2014, legislators have tried to regain control of the university system several times. But prospects for bipartisan support look better than ever at the start of this year’s legislative session, according to news reports.

Texas universities are looking for more public funding to teach more students, build or renovate classrooms and laboratories, and fund financial aid for low-income students.

“We want the state to invest in our young people. We want them to invest in intellectual knowledge,” Robert Duncan, chancellor of the Texas Tech University System, told Dallasnews.com last month on the eve of the new session.

Such investment, Duncan said, will help the state grow, create jobs and remain competitive.

But without state oversight, tuition has risen so fast that families cannot afford to send their children to college, said Sen. Charles Schwertner, the Republican author of a bill that would cap tuition at the state’s colleges and universities at their current level and allow increases only at the rate of inflation.

“The dream of attaining a college degree is becoming a nightmare for more and more Texas students," Schwertner wrote in the Texas Tribune.

Before Walker’s controversial proposal last week, Wisconsin university officials had asked for a $95 million increase to $1.2 billion in state funding to support business development and entrepreneurship, recruit students to high demand fields, get students to degrees more quickly and offset a tuition freeze.

"The growth of the economy is on our shoulders. I think it is an investment in the future of this state.” UW System President Ray Cross said of the budget request in August.

Tuition at UW was frozen for two years, starting with the 2013-2014 school year, after a political battle over the level of university fund reserves as the Board of Regents raised tuition by the maximum 5.5 percent allowed for six years running.

State oversight has not prevented steep tuition increases in Wisconsin. At UW-Madison, for example, tuition rose 102 percent from the 2003-2004 school year to 2013-2014.

In Texas, however, one study found that after deregulation, tuition at the state's research universities rose more rapidly than at comparable schools around the country and that the number of new Latino students dropped below what trends predicted.

The study, co-authored by Stella Flores, an associate professor of public policy and higher education at Vanderbilt University, shows that changing who controls tuition won’t help states make college more affordable, Michael McLendon, dean of the education school at Southern Methodist University, told Inside Higher Ed.

Flores’ findings, “that the 2003 tuition decentralization initiative in Texas suppressed enrollments in higher education among Hispanics, should give pause to policy makers in other states: simply passing the political buck to campuses for increases in tuition appears to be utterly counterproductive to states’ efforts in improving college participation and attainment," McLendon said.

The study did not find a lower than predicted growth in enrollment in Texas for African-American or low-income students, however.

“This finding likely reflects the pricing out of [Latino] students, who were either unable to afford the higher tuition or no longer perceived the increase in their human capital provided by these institutions to be worth the higher price,” the paper says. “Hispanics likely opted to attend less expensive alternatives, including non-research, two-year or for-profit institutions; or no attendance at all.”

The negative impact on Latino enrollment occurred even though the law giving universities control over tuition required them to set aside more money for financial aid.

“For Latinos, that wasn’t enough,” Flores said in a phone interview.

Student perceptions about their ability to pay for college play a big role in their decision-making, Flores said. And lack of familiarity with the financial aid system — especially for families looking to send their first generation to college and immigrant families without strong English language skills — may mean the information on how to mitigate the increase was not received.

“That information didn’t get through to the families. All they saw was a huge price increase,” Flores said.

Other research has shown that Latino students are more averse to loans than African-American students, Flores added.

As more universities turn to higher tuition in times of falling public funding, “institutions need a clear and precise information campaign on how to mitigate that, preferably in more than one language.”

The idea that tuition hikes can cover funding cutbacks is a myth, Peter Orszag, former director of the Office of Management and Budget for President Obama, writes at Bloomberg.com.

Diminished public funding instead has wrought an erosion of professor salaries and overall rankings of public universities compared to private schools, Orszag said. In the late 1980s U.S. News and World Report ranked eight public universities in the top 25 nationally, today there are only three, he said.

One way universities can respond to cost pressures in the current political climate is to increase the use of online learning, he suggests, something even professors are beginning to accept.

“This can't happen fast enough to save the University of Wisconsin, however, if Governor Walker’s proposals are carried out,” Orszag writes. Flagship UW-Madison came in 47th this year in the U.S. News rankings. “Anyone care to bet on where it will be in the 2017 rankings?”

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