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Foundations and Tuition Freezes Among Items on UT Regents' Agenda

The relationship between the University of Texas School of Law and an affiliated foundation is among the topics on the minds of University of Texas System regents as they convene a two-day meeting that starts Wednesday.

UT Board of Regents Chairman Gene Powell asks the Board to support Chancellor Dr. Franciso Cigarroa at their Austin meeting on May 12, 2011.

The relationship between the University of Texas School of Law and an affiliated foundation, which drew headlines over a forgivable loan program, will be again under the microscope this week when the University of Texas System's Board of Regents meets.

Guaranteed tuition plans and tuition freezes are also on the agenda for the regents' two-day meeting, which they will convene Wednesday. 

What exactly will be discussed regarding the UT Law School Foundation and a system review of its policies during a closed-door meeting of the regents' Audit, Compliance, and Management Review Committee on Thursday morning is not clear, but it could be significant.

The foundation came under scrutiny following the forced resignation of UT-Austin law school Dean Larry Sager in December 2011 amid the revelation that the foundation was doling out large forgivable loans to faculty, including $500,000 to Sager, with little oversight.

In November 2012, the UT System released a report by vice chancellor and general counsel Barry Burgdorf finding that the loan process was “not appropriate.” The regents discussed the findings of the report that month in their executive session. 

Afterward, Gene Powell, the chairman of the board of regents, announced a new Advisory Task Force on Best Practices Regarding Affiliated Foundation Relationships. Chaired by regent Brenda Pejovich, the task force is supposed to issue recommendations regarding optimal structures for outside foundations within 180 days.

But the foundation issue is already back on the agenda. According to the schedule, the regents intend to hold a discussion regarding “evaluation, assignment and duties of individual personnel involved in review of the relationship” between the law school and the foundation. They will also consult with attorneys about “legal issues” concerning the review of that relationship.

UT System spokeswoman Jenny Lacoste-Caputo declined to comment on any executive committee discussions.

Before the regents get to the law school foundation issues on Thursday, though, they will spend Wednesday touching on a number of issues, including tuition and the cost of education.

The board’s Academic Affairs Committee will consider recommending that each campus have a guaranteed tuition plan, which would lock in tuition at a set price for four years, as an option for its students.

Currently, the University of Texas at Dallas has guaranteed tuition as its normal pricing strategy for students, but it also has the highest tuition in the state for first-year students. The University of Texas at El Paso has an optional plan, but it has not proved particularly popular among students. The presidents of both institutions will be on hand to provide their perspectives.

Requiring campuses to have guaranteed tuition plans as an option for students has been a priority for Gov. Rick Perry, and it’s also the subject of House Bill 29, filed by House Higher Education Committee Chairman Dan Branch, R-Dallas.

Regents will also have the opportunity to review the results of a $16 million investment in tuition reduction strategies they made last May. With that money and additional cost-saving strategies, each of the system's nine academic institutions will have a smaller increase in tuition in the coming fall than what the regents had initially approved. 

Though increases were approved, tuition will not be going up at all on the system's Permian Basin, Tyler and Arlington campuses. It won't be going up at UT-Austin either, but the regents refused their requested tuition increase, so that does not come at a surprise.

Also on Wednesday, Scott Kelley, the executive vice chancellor of business affairs, will give a presentation on administrative costs. He will lay out the strategies the system has used to save nearly $2 billion since 2007 and to be on track to save $4 billion by 2016.

Much of these savings are the result of shared services initiatives, in which individual campuses band together to accomplish certain tasks. Similar strategies are increasingly common in a public higher education industry dealing with declining state funding.

“We have a lot more work to do and we have a large system, but it has an impact,” Kelley said. “We’re going to continue to look for ways to drive out costs and become more efficient.”

Kelly cited the example of the Texas Digital Library, through which a number of UT campuses share journal subscriptions. He estimates that going in together on these subscriptions has saved $426.7 million since 2007.

“In fairness,” he said, “many of those institutions could not have afforded and would not have purchased all those journals on their own. But being able to access them adds value for their students."

Another potential cost-saver that is calculated in the estimates going forward is the construction of a new system administration building in downtown Austin. When the plan for the roughly $100 million building was rolled out in November, the consolidation from five aging buildings to one state-of-the-art facility was projected to save the system up to $60 million over the next three decades.

But after the proposal drew criticism from legislators, system officials announced that it was being put on the back burner for now.

“That truly is an opportunity to drive some additional savings,” Kelley said. “With other priorities that are in play right now, it was determined best to hold off right now, but I do think we’ll have an opportunity to at least revisit that discussion.”

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