Tuition Discounts and Waivers—The Reality

Sen. Mark Green (R-Clarksville) will be presenting legislation before the Senate Education Committee on Wednesday regarding another higher education tuition discount. Green’s legislation seeks to expand the current 25 percent discount for “children of full-time certified teachers…or full-time technology coordinators in any LEA in TN,” to include children of “anyone employed full-time by any LEA in TN.”  Accompanying the bill is a $6 million fiscal note, a factor that will almost certainly limit the survival of such a proposal.  However, what this bill represents is an important conversation for higher education advocates:  the reality of the tuition discount in Tennessee.

Each year, a number of tuition discount and waiver bills are filed. While almost always well-intentioned legislation, tuition discounts and waivers carry with them a bleak funding reality.  In fact, they have an effect very similar to that of an unfunded mandate.

Take the most recent fiscal year, for example.  Statutory tuition discounts are supposed to be funded via state appropriations.  But in the most recent fiscal year alone, Tennessee’s public colleges and universities have been forced to cover more than 86 percent of the $16.5 million in costs associated with the discounts.  The State, instead of covering the discount at 100 percent via appropriation, covers a mere 13.7 percent.  As such, the problem doesn’t rest with the tuition discount itself, but instead with the meager funding provided.

What happens when the institution is required to pick up 86 percent of the cost to provide these discounts?  That’s a great question that gets to the crux of the issue.

Typically, the only recourse for public colleges and universities to cover the unfunded portion of the discounts is to allocate funds from their operational budgets—funds which are made up predominantly of tuition dollars paid by the overall student population.  As more tuition discounts are enacted by lawmakers (and the associated costs grow with limited state funding), so too the burden on the institution grows.  And as the burden on the institution grows, so does the need for tuition increases to cover such costs.

The issue becomes further complicated this year.  Sen. Todd Gardenhire (R-Chattanooga), who currently sits on the Senate Education Committee, has been openly critical to the expansion of such tuition discount and waiver programs.  Recently, Sen. Gardenhire submitted legislation that would abolish each statutory tuition discount and waiver program.  Whatever the outcome of each legislative item mentioned above, it is important to continue to shed light on the funding reality of such proposals.

NOTE:  The discount and waiver programs discussed above are separate and distinct from the tuition benefit policies for current faculty and staff employed by the university.

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