UT-Austin will provide free tuition to undergrad students with family incomes below $65,000 starting in 2020
By SHANNON NAJMABADI | 7/22/2019, 9:52 p.m.
System officials have said in the past that their projects saved money by centralizing functions and benefited students at UT’s other institutions. The state constitution allows only UT-Austin to receive operational funding from the endowment; other campuses can get bonds backed by the oil fund for construction, and the system can use it for capital projects and administration.
The Texas endowment dates to 1876, when the state set aside more than 1 million acres of West Texas land to support the development of the UT and Texas A&M University systems. The value of the fund shot up with the discovery of oil and the advancement of hydraulic fracturing. In May 2019, its value was $22.3 billion, according to the UT System.
Typically, royalties earned off the land are invested in stocks, bonds and other assets by the nonprofit University of Texas/Texas A&M Investment Company, known as UTIMCO. Annual distributions from the fund cannot surpass 7% of the market value of its investments. Two-thirds of the payout is earmarked for UT, and the remainder is for A&M.
The board approved a more than $1 billion distribution in May, and July 9 sent an additional $83.3 million to A&M. With the supplementary funding, the annual payout now totals about 6.86% of the fund’s investments.
A&M has for years had a financial aid program that covers tuition costs for students whose families have an adjusted gross income of $60,000 or less. Last year, 6,726 students benefited from it, according to a statement from the system, and its board set aside $30 million in 2018 to offer one-time grants to students coming from families that earn between $40,000 and $100,000 a year.
Laylan Copelin, a spokesperson for the Texas A&M University System, said of the funding distributed July 9, “We will discuss with our regents how best to spend this money for the benefit of our students.”
Disclosure: The University of Texas at Austin, the University of Texas System and Texas A&M University have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism.
This article was first published at https://www.texastribune.org/2019/07/09/ut-system-spends-160-million-financial-aid-ut-austin-students by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.