Seeking to make college more affordable, the University of Texas will use some of its oil money to dramatically expand the financial aid it offers to low- and middle-income undergraduates on its flagship Austin campus.
The system’s governing board approved a special $160 million distribution from its endowment Tuesday, which school officials expect will fully cover the tuition and fees of students whose families earn up to $65,000 in adjusted gross income a year starting in 2020. The funding, which will be used to create a new financial aid endowment, will also let UT-Austin alleviate tuition costs for students whose families earn up to $125,000 annually, if they demonstrate financial need.
The funding marks a significant expansion for UT-Austin, which currently has a financial aid initiative that guarantees free tuition to students whose families earn up to $30,000 a year. The median household income in Texas was just over $59,200 in 2017, according to U.S. Census Bureau data.
School officials estimate about a quarter of its undergraduates from Texas — 8,600 — would have their tuition fully paid under the new plan, and an additional 5,700 would receive financial aid from it. The program will not pay for students’ living expenses, which were estimated to be around $17,000 for the 2019-2020 academic year. Tuition and fees averaged $10,314 for Texas residents.
UT-Austin President Greg Fenves said he was grateful to the board for “prioritizing students and investing in the future of our great state.”
“Chairman Eltife understands that college affordability is one of the most critical issues affecting all Texans,” Fenves said, in a written statement. “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 UT System has one of the richest educational endowments in the country, second in size only to Harvard University last year, according to Bloomberg data. (The system has far more students across its 14 institutions than those that attend Harvard.)
This developing story will be updated.