Texas State University announced on Sept. 4 that it had enrolled a record 47,513 students, and its president used the moment to talk about price. “We haven’t raised tuition since 2021,” Kelly Damphousse said, “and have committed to keeping tuition flat through 2027.”
Every out-of-state student on his campus is nonetheless paying more this fall. The increase was not decided in San Marcos, or in Austin, or by anyone who works for a Texas university. It was decided by what public universities in California, Florida, Illinois, New York and Pennsylvania charge their own out-of-state students.
That is not a figure of speech. Section 54.051 of the Texas Education Code fixes tuition for a Texas resident at a state university at $50 per semester credit hour — per credit hour, the unit a course is measured in, with a full-time year running about 30 of them. For everyone else, the same statute sets the rate at “an amount per semester credit hour equal to the average of the nonresident undergraduate tuition charged to a resident of this state at a public state university in each of the five most populous states other than this state.” Texas sets what Texans pay and imports what everybody else pays from the five states it competes with hardest for students.
The Texas Higher Education Coordinating Board runs that calculation once a year and tells the universities the answer. On Dec. 12, 2025, Assistant Commissioner Charles W. Contéro-Puls wrote to every public university president and chancellor in the state that the rate for this academic year “will be set at $478 per semester credit hour.” Last year it was $455. The $23 increase works out to about $690 more a year for a full-time out-of-state student, at every public university in Texas, regardless of what that university decided about its own prices.
The board publishes its arithmetic, and the worksheet is the clearest statement of how the number is built. It averages published tuition and fees for 30 credit hours at every public university in the five states — California $30,211, Pennsylvania $25,063, Florida $22,112, Illinois $20,039, New York $19,829 — to reach $23,451. From that it subtracts $3,190 in average Texas mandatory fees and $5,912 in average Texas designated tuition, the portion a university sets for itself. What is left, $14,349 for 30 hours, divided by 30, is $478.
The subtraction produces a result the Legislature is unlikely to have intended. Because the board deducts what Texas universities charge in designated tuition, a Texas university that raises its own tuition mathematically pushes the statewide statutory rate for out-of-state students down, and one that holds its prices flat pushes it up.
Some of the inputs are old. The board says it used the most recent federal figures available, which cover the 2024-25 academic year, to set a rate for 2026-27. It states two assumptions plainly: that average mandatory fees in Texas “are representative of the average mandatory fees in other states,” and that other states “also have both standard and designated aspects in their tuition calculations.” Its inflation adjustment, it writes, came from “calculating the percentage change between September 2025 and October 2024” — eleven months, not twelve.
The formula has been in the statute since 1995, and the same five states were the comparison then. A House Research Organization analysis from March of that year recorded the objection opponents raised at the time: raising non-resident tuition “would reduce the number of non-Texas students attending Texas public colleges and universities and make the campuses more insular and provincial.” The formula has not been amended since. It also runs in both directions: the board’s own memo put the rate at $460 two years ago and $455 last year, so out-of-state students saw it fall twice before it rose $23.
For families, the practical answer has been to stop being out-of-state. Texas recognizes four ways to document the domicile that in-state tuition requires: significant gainful employment, marriage to a Texan, ownership and management of a business, or residential real property. The Coordinating Board rewrote those rules effective Nov. 13, 2025, and broadened the property route, which for twenty years had counted only ownership, to count leasing and renting as well. The rule asks for twelve consecutive months of domicile at that residence in the year before enrollment.
Chesney Coker, broker and co-owner of Tower Realty in Austin, which sells to out-of-state families pursuing exactly this, said a purchase can put down roots and cut a tuition bill at the same time.
“A UT-area property purchase is an excellent investment if you are looking to save tens of thousands on out-of-state tuition,” Coker said. “Texas State law makes it possible for out-of-state families to gain Texas residency for their students and to qualify for the in-state tuition at Texas’ public universities. It’s a win-win for the state as out-of-state families will pay Texas property taxes over multiple years. It allows for the state to attract and retain top talent from across the nation, while also adding more tax revenue to the state’s coffers.”
Whether students who enroll here stay here is the part of the argument with the best evidence behind it. A report released in August by Strada Education Foundation and the Upjohn Institute found that Texas loses 16 percent of the graduates its institutions produce to other states — the lowest rate in the country, ahead of California at 17 percent and Florida at 28 percent. “Public colleges and universities,” the researchers wrote, “are anchors for in-state talent.”
The next rate is due from the Coordinating Board by Jan. 1, and it will again be an average of five other states’ prices.