AUSTIN, Texas (Big 2/Fox 24) – You may have heard, this week the University of Texas at Austin announced they would be providing free tuition to qualified students.
What you might not have known, is those funds were generated right here in our own West Texas backyard.
Through the permanent University Fund, UT Austin will provide free tuition to students whose families make less than $65,000 per year. The fund would also provide tuition assistance for students whose families make less than $125,000 per year.
But how does West Texas fit in you might ask…
Sitting on a gold mine
Back in the 1800’s, the University of Texas acquired land in the western portion of the state for cattle. 19 counties to be exact, including Andrews, Martin, Pecos, Winkler, Ector and several more. What they didn’t know at the time, is that the acreage they acquired would turn into a gold mine.
When UT acquired the land they set up an endowment that is known as the Permanent University Fund. Since it’s creation, the UT System has leased those lands to various companies and people.
The mineral income from the land is generated by oil and gas companies who use it, and income from the surface land is generated from things like wind farms, grazing, and vineyards.
The UT System Board of Regents is given authority by the Texas Constitution to manage these lands and does so through a branch called University Lands.
Now the 2.1 million acres in West Texas make up the second largest endowment in the United States.
While it may not seem like much, West Texas oil and gas and the productivity of our communities have helped make the new initiative from UT Austin possible.
“It makes you proud because we know that our West Texas lands is what are stewarding this fund to allow kids to go to school at the University of Texas in Austin for free, and I think that makes everyone super proud,” Kirk Edwards said.
The estimated market value of the fund in 2019 is more than $20 billion.
Pieces of the Pie
The Texas Constitution states that no more than 7% of the PUF can be distributed in one year. As such, the UT System gets two-thirds of the available funds, while the Texas A&M System gets one-third.
The pooled money is then divided up and the Constitution dictates what the system schools can put it towards.
System schools, according to University Lands Board Member Kirk Edwards, can use the funds for construction or facilities. However, being the flagship University in Texas, UT Austin is much more flexible in how they can spend the money they receive.
It was this flexibility that opened the door for free tuition to UT students. With these PUF funds, UT Austin will set aside $160 million that will create a new endowment going directly to financial aid.
That funding would then be available to any in-state undergraduate student who qualifies, starting in Fall 2020.
UT Austin President Greg Fenves told KXAN Tuesday that this funding became available after several years of efforts to make higher education more affordable on the Forty Acres.
Back in 2016, Fenves committed $7.5 million a year to increase financial aid for middle-income students and in 2018 committed an additional $5 million. He explained that the more than 12 million dollars UT Austin generated for financial aid through those efforts were not meeting the need of students, so he turned to the UT System for help.
State Senator Kel Seliger (R-31), applauded the UT System and said a move like this was long overdue. Seliger also says that the new initiative can serve as a model for the entire country.
“This is going to set the tone for the rest of the nation,” Seliger said on Thursday.
However, Seliger says there is one question he has; what about the other system schools with students who are struggling with tuition costs. Currently the free tuition and tuition assistance are only for UT Austin students.
UT expects that 8,600 of its current undergraduate students would qualify to have their tuition and fees completely covered and that an additional 5,700 students would qualify for partial tuition support through this endowment.