UT-Austin To Offer Low-, Middle-Income Students Free Tuition

AUSTIN, TX — Dipping into its oil money reserves, the University of Texas at Austin will make college more affordable to low- and middle-income undergrads by expanding its financial aid, school officials announced on Tuesday.

To that end, the UT system's governing board approved a $160 million distribution from its endowment designed to fully cover tuition and fees of student from families earning up to $65,000 in annual adjusted gross income in 2020. The new funding source also help mitigate tuition costs for student from households earning up to $125,000 annually once financial need is demonstrated.

The median household income in Texas was $59,206 in 2017, according to the U.S. Census Bureau. The university will fill the gap with its Permanent University Fund derived from oil and gas royalties earned on state-owned land in West Texas, officials said.

“Recognizing both the need for improved access to higher education and the high value of a UT Austin degree, we are dedicating a distribution from the Permanent University Fund to establish an endowment that will directly benefit students and make their degrees more affordable,” Chairman Kevin Eltife said after the vote. “This will benefit students of our great state for years to come.”

The newly launched endowment will be used to expand UT Austin’s Texas Advance Commitment program for in-state undergraduate students to accomplish the following:

• Completely cover tuition and fees for students from families that earn up to $65,000 a year who have financial need, and,
• Provide some assured tuition support to students from families with incomes of up to $125,000 who have financial need.

“I am grateful to the UT System Board of Regents and Chairman Kevin Eltife for prioritizing students and investing in the future of our great state,” UT Austin President Gregory L. Fenves said in a prepared statement. “Chairman Eltife understands that college affordability is one of the most critical issues affecting all Texans. Thanks to his leadership and the board’s action, this new endowment will go a long way toward making our university affordable for talented Texas students from every background and region.”

The regents’ vote represents one of the largest financial aid commitments to improve the predictability and affordability of higher education among the nation’s leading public research universities, school officials noted. The endowment will support undergraduates from across Texas, including first-year through fourth-year and transfer students, UT-Austin officials added.

“There is no greater engine of social and economic mobility than a college degree, and this initiative ensures that more Texans will benefit from a high-quality UT Austin education," Chancellor James B. Milliken said in a prepared statement. "The use of Permanent University Funds to invest directly in students demonstrates the strong commitment of the Board of Regents and UT Austin to the values of public higher education."

Officials said UT Austin has the highest academic rankings among public universities in Texas and is consistently recognized as one of the world’s leading research universities. But it has an annual average undergraduate in-state tuition and fees of $10,314, which is less than 12 other Texas public universities, according to data published by the Texas Higher Education Coordinating Board.

In 2016, Fenves committed $7.5 million a year to increase financial aid for middle-income students. Last year, he added an additional $5 million to that funding and launched the first phase of the Texas Advance Commitment, which currently provides full tuition assistance for students from families earning up to $30,000 a year and guaranteed financial aid for qualified families earning up to $100,000.

More than 4,000 students were supported through the Texas Advance Commitment during this past academic year, its first year of implementation.

In awarding financial aid to middle- and low-income students, the university will continue to draw from multiple sources, including federal Pell grants, and the TEXAS Grants program, which received additional support from the Texas Legislature this year, according to a university press advisory. The funds from the new endowment will then be used to supplement grants and scholarships. The Texas Advance Commitment does not rely on loans or require students to pay back any funds, officials added.

This latest support from the regents will allow UT Austin to provide:

• Full tuition coverage to more than 8,600 undergraduates a year from families that earn up to $65,000 a year,
• Assured tuition support to an additional 5,700 students from families that earn up to $125,000 a year.

Officials added: This commitment to affordability represents a shared partnership among the university, state and federal governments, students and their families to cover the costs of a UT education and maintain the university as one of the best values in Texas and the U.S. In 2018, Kiplinger’s Best Value Colleges ranked UT Austin No. 8 in the nation.