Texas Law Forces College Students to get Loans to Pay for Other People's Tuition

Update: New Article "Stop Texas 20% Tax on College Students! Repeal Tuition Set Aside Law!" explains in detail how and when we got this tax.

You probably think I am kidding, but I am not. In TEXAS of all places, there is an Obama-style share the wealth program that requires students going to college to pay thousands of dollars in extra tuition to pay for other people’s college tuition assistance. It does not matter if you are working double jobs to pay your way through school, you still get to pay for someone else. Even if a Texas college student is getting student loans to pay for school, they still have to pay extra for someone else. In other words, a Texas student getting student loans has to borrow money and pay interest on a loan in order to pay thousands of dollars in extra tuition so that someone else can go to college for free!

This tuition set aside program is required by Texas Education Code sections 56.011 and 56.012. The program must not be very old because I know when I went to Texas A&M University I did not pay extra tuition for someone else. In the 81st Texas Legislature, Senate Bill 1304 was passed that requires schools to inform students of the amount they paid in tuition that will be set aside to pay for someone else. Transparency is good, but students should not have to borrow money to pay for someone else’s tuition in the first place!

I would never have even known about this if it were not for a concerned parent who forwarded me an email that he got from his son who is attending the University of Houston and paying his tuition via student loans. This UH student was shocked to get an email from the University letting him know how much money he had paid in tuition to pay for someone else. Before he graduates he will have had to borrow over $6000 in loans in order to pay for someone else’s tuition assistance! Don’t get me wrong, I am all for college access for everyone, even the poor. That is what student loans are for though. Even poor people can get a student loan with a low interest and not have to pay anything until after they graduate and get a job. Sure the state or federal government will incur some costs to pay for financial aid programs and to pay to run student loan programs (assuming the loan programs do not already pay for themselves from student loan interest), but this cost should not be passed down to the students simply because they decided to go to college. One student should not have to get a student loan and pay interest in order to pay for someone else to go to college for free.

Below is the email I got from this concerned parent. Also below is the email this concerned parent got from his son explaining how the school had charged him extra tuition to pay for someone else:

From: *****
David Bellow,

Have you ever heard of a program like this before? For a couple of years my youngest son **** who is in his third year of law school at U of H has been telling me about a state policy/law where a portion of every student loan he takes out goes to a fund for OTHER students. In other words when he’s borrowing money for his own education, he is being mandated by the state of Texas to borrow a certain amount for someone else to get to go to school. Then he gets to pay it back with interest! This is incredible to me. And from his message to me below, it started in the 81st Legislature and was called Senate Bill 1304. The students who can least afford it (they have to borrow money to go to school in the first place) are having to pay for other students’ tuition! Talking about spreading the wealth – and from those who can least afford to have it taken away from them! This wasn’t passed by Democrats. It was a Republican-led legislature and signed by a Republican governor. Unbelievable. This needs to be given the light of day to have this rescinded.

Have you ever heard of such?

Begin forwarded message:

From: *****
Subject: Fwd: University of Houston: Set Aside Notice
Hey Mom and Dad,

Below is the email I have told you about. I just received it this evening and thought I'd forward it to you to see for yourself.

By the time I graduate, I will have been forced to BORROW roughly $6,000 to pay for someone else's tuition. The state of Texas is forcing me to borrow money which will take me years to pay back (with interest) to pay for someone else. Completely outrageous.

I don't see how this would hold up in court. The State should cut me a check for $6,000 plus interest.

Begin forwarded message:
From: "University of Houston Office of Student Financial Services"
Date: July 26, 2013, 5:05:05 PM CDT
To: ****
Subject: University of Houston: Set Aside Notice

Dear ****

Please note: This email is not a bill. No action is required. This message is for informational purposes only and complies with Senate Bill 1304, passed by the 81st Texas Legislature, which requires that Texas public universities report to each resident student the amount of his or her paid tuition that has been set aside to provide financial assistance programs for qualified students at that institution. The total amount of your paid resident tuition for the Summer 2013 term that was set aside by the University of Houston to provide financial assistance programs for qualified students was 452.93. Sincerely,
Office of Student Financial Services
University of Houston

The University of Houston
4800 Calhoun Road
Houston, Texas 77004


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