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Three Tuition Equalization Grant Changes Offer New Opportunities for Texas Private Higher Education Institutions

Starting July 1, 2026, most higher education institutions will feel the effects of loan proration, loan aggregate limits, and the elimination of new Grad PLUS loans. This will mean less available funding for enrolled students and potential enrollment and cash flow challenges for institutions.

However, for private higher education institutions in Texas, recent updates to the state’s Tuition Equalization Grant (TEG) program for the 2025-2026 fiscal year present new opportunities that may help offset some of the impact of federal loan changes.

What is the Tuition Equalization Grant Program?

The TEG program provides needs-based grants to Texas residents enrolled in approved private or independent colleges and universities in Texas. The program aims to help equalize the tuition between private and public higher education institutions, and TEG funds do not need to be repaid.

Program Benefits and Requirements

The TEG program allows private colleges and universities to supplement federal awards to students. Key features and requirements include:

• Institution-level allocations – The state allocates TEG funding in total to institutions. The preliminary 2026 allocations are available here.
• Flexible disbursement timing – TEG funds do not have to be disbursed equally between semesters. Institutions may award the full amount in one semester if the student meets all eligibility requirements.
• Accreditation requirements – Participating institutions must be accredited by the Southern Association of Colleges and Schools or the American Bar Association, as required by the Texas Education Code Chapter 61, Sec. 61.003(15).

Many institutions will find the administrative requirements manageable. While institutions must collect core residency forms and complete certain reporting requirements, many of these steps align with existing student financial aid processes.

How 2025-2026 TEG Changes Can Benefit Faith-Based Institutions

Three notable changes to the TEG program guidelines for 2025-2026 may be especially beneficial for many faith-based institutions in Texas:

• Seminary eligibility added – The state removed the restriction that excluded religious seminaries from participating in the program. This is a potential advantage for Texas seminary students who were previously ineligible, since there is no maximum funding period for first-time graduate students.
• Ministry degrees included – The state also removed the requirement that excluded funding for students in a degree intended to lead to religious ministry.
• Award amounts increased – The annual award increased from $3,873 to $4,270, and the 150% exceptional financial need award increased from $5,810 to $6,405. For the definition of “exceptional financial need,” see the TEG 2025-2026 program guidelines.

Why This Matters Now

With federal loan options becoming more limited, state-based grant programs like TEG may play a larger role in helping private institutions remain competitive and accessible. For Texas institutions that have not previously participated in the program, these changes may make it worth considering now.

CapinCrouse is available to help answer any questions you may have about the application process, compliance requirements, or other aspects of the TEG program. Please contact us to learn more.

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