A Cost-Benefit Analysis of Texas House Bill 1403: An Act Relating to the Eligibility of Undocumented Students to Qualify as In-State Residents for the Purposes of Higher Education Tuition
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With the passage of House Bill 1403 in 2001, Texas became the first state to pass legislation allowing undocumented students to qualify for in-state tuition at public colleges and universities. However, allowing students who do not legally reside in the United States to pay resident tuition is a highly controversial and politically charged issue that is the source of ongoing debate. Almost invariably, during each legislative session there are calls to overturn the in-state resident tuition policy. Therefore, the purpose of this research is to conduct a cost-benefit analysis of Texas HB 1403 to determine if the policy is socially beneficial. Because roughly 80 percent of the undocumented population in the U.S. is Hispanic, the analysis focuses specifically on the costs and benefits of the provision of this incentive to Hispanic students. This study considers three costs and three benefits of the policy. The costs include lost tuition revenue, increased financial aid and admissions administrative costs, and opportunity costs of lost income during enrollment. The benefits of the policy are increased wages, reduced incarceration costs, and a reduction in public healthcare spending. The cost-benefit analysis found that the policy is socially beneficial for the state. Thus, this paper recommends that Texas's in-state resident tuition policy be upheld.