Campaign Questions: How do you think the comptroller’s office handled the Texas Guaranteed Tuition Plan?
Unfortunately in this instance the Comptroller failed to faithfully execute the oath of office, not in management of the fund, but in being the watch dog and standing up Gov. Rick Perry's and the Legislature in 2003 when they decided to cut state support for public universities while allowing the board of regents at each to set tuition rates.
In many cases, the contracts had more than doubled in value because of tuition increases at state universities. Tuition costs skyrocketed, though. From fall 2003 through fall 2010, the statewide average total academic charges for a student taking 15 semester hours at a public university has increased by 83 percent, according to the Texas Higher Education Coordinating Board. Meanwhile no university athletic department makes more money than the University of Texas.
While the State pays $206 million annually in support of the University of Texas system. The football and men's basketball teams account for approximately 70% of the athletic department's revenue. Total athletic department revenue: $163.3 million, but less than 6% of all revenue is spent on scholarships $9.4 million. Texas lawmakers adjourned without fixing the state's prepaid college tuition program, which now faces a $600 million shortfall and could go broke as early as 2014 by some estimates. If that happens, state taxpayers may have to cover the shortfall because the state constitution guarantees payment to those who bought in.
The fund, originally the Texas Tomorrow Fund and later renamed the Texas Guaranteed Tuition Plan, was originally designed to help middle-class families afford college.
It stopped accepting new contracts in 2003, but still has about 89,700 active ones. Those contract holders are guaranteed that the contract will cover tuition and mandatory fees at a public university or could be used at its full value at a private university.
The fund had thousands more contracts in the summer of 2009, when the Texas Prepaid Higher Education Tuition Board, mindful of a growing shortfall, said refunds would be limited to the actual amount people had paid in, minus administrative fees, rather than the full value of the contract. Approximately 7,400 contracts were canceled as families rushed to cash out their contracts before the new policy took effect, because of the potential that their student would opt not to go to college, would graduate early or would receive full scholarships.
As Texas Comptroller I will resolve the Student Loan crisis for all Texans. Being a victim myself, 10 years and over $50 K in legal fees, I know first hand how broken this system really is.