Old Tuition Fund Costing Texans $211 M Over Next Biennium

When Texas lawmakers sit down to draft a two-year budget, they'll already have $211 million less to work with thanks to a prepaid tuition plan no longer bringing in money.


That's according to the state comptroller's biennial revenue estimate released this week.


The Texas Guaranteed Tuition Plan allowed parents to prepay for their children's college educations, locking in then-current rates for tuition and fees.


“We stopped accepting new contracts when the Texas Legislature deregulated tuition in 2003 because we were anticipating significantly higher tuition rates,” says Kevin Lyons, spokesperson for the comptroller's office.


However,existing contracts are still guaranteed under the state constitution.


“So any shortfall automatically triggers a withdraw out of the state's general revenue, so it's coming out of GR revenue as $211 million, so that's going to be paid,” says Lyons.


“The unfunded liability before the $211 million was about $600 million, so the year 2039 is the last year we'll still have people able to use the plan.”


Texas began a new prepaid tuition plan in 2008, but it is not guaranteed by the state.

 

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