In Fisher v. Texas this term, the US Supreme Court will determine the constitutionality of the University of Texas at Austin’s use of race in undergraduate admissions. While a decision striking this program of affirmative action seems foreordained, the larger admissions policy at UT-Austin—framed by the state’s race-neutral Ten Percent Plan—exemplifies the dilemma faced by state universities across the country seeking to maintain both academic excellence and broad access in times of declining public support.

Abigail Fisher and other applicants challenged the UT-Austin’s consideration of race in admissions as a violation of the Fourteenth Amendment's equal protection clause. The school defends its program as an effort to promote diversity. The admissions policy does not set aside seats or give points to members of selected racial or ethnic groups. Instead, the school argues, it engages in a holistic review of all applicants for all remaining spots as individuals—a policy modeled on the University of Michigan Law School admissions policy affirmed by the Supreme Court in Grutter v. Bollinger (2003). A federal district court and a panel of the Fifth Circuit Court of Appeals, grudgingly following Grutter, upheld UT-Austin’s admissions policy.

The US Supreme Court granted review, and there appear to be five firm votes to hold the UT-Austin program unconstitutional and to overrule Grutter. Three dissenters in Grutter—Justices Scalia, Thomas, and Kennedy—remain on the Court, and none has ever voted to uphold a government program that allows consideration of race. Chief Justice Roberts and Justice Alito came to the Court after Grutter. However, in a 2007 case striking down Seattle’s use of race in assigning students to public high schools, Roberts—joined by Alito—concluded his plurality opinion by stating: “the way to stop discrimination on the basis of race is to stop discriminating on the basis of race.” With Justice Kagan recusing herself from the UT-Austin case, there is no chance that the Court took this case, ten years after Grutter, to affirm the lower courts.

UT-Austin’s policy of considering race applies to only 25 percent of its incoming class. The bulk of seats—75 percent—are predetermined by class rank under Texas’s Ten Percent Plan. The plan assures that all students who finish in the top 10 percent of the graduating class of their public high school are assured a spot in any of Texas’s public colleges and universities. Most of UT-Austin’s class is thus admitted without consideration of test scores or of any other individual achievements or experiences.

The Ten Percent Plan was passed by Texas’s legislature in 1997, a year after the Fifth Circuit Court of Appeals, in Hopwood v. Texas, prohibited the use of race in admissions by UT-Austin’s law school. “We want our universities to reach out to students from all walks of life,” said ­then-Governor George W. Bush, “and this legislation gives them the flexibility to do that.” As president, announcing his administration’s brief in Grutter against the Michigan program, Bush offered Texas’s Ten Percent Plan as an alternative: “Race-neutral admissions policies have resulted in levels of minority attendance for incoming students that are close to, and in some instances slightly surpass, those under the old race-based approach.” After the Grutter decision, however, UT-Austin revised its policy to consider race when filling any seats remaining after Ten Percent Plan students were automatically admitted.

The success of the race-neutral Ten Percent Plan in enrolling more minority students to UT-Austin—though not challenged in Fisher—figured significantly in the Fifth Circuit’s constitutional analysis. “While the Law may have contributed to an increase in overall minority enrollment,” wrote Judge Patrick E. Higgenbotham in the majority opinion, “those minority students remain clustered in certain programs, limiting the beneficial effects of educational diversity.” Conversely, the success of the Ten Percent Plan was cited in Judge Jerry Smith’s special opinion as a reason why UT-Austin’s consideration of race for admission of the rest is no longer necessary. “The University was able to obtain approximately 96 percent of the African-American and Hispanic students enrolled in the 2008 entering in-state freshman class using race-neutral means,” Smith wrote. “As such, the University’s use of race can be neither compelling nor narrowly tailored.” (Smith still voted to uphold UT-Austin’s program as “a faithful application of Grutter’s teachings, however flawed I may find those teachings to be.”)

Given its positive impact on minority admissions, and his defense of the current race-based policy, it may seem surprising that UT-Austin’s President William C. Powers has urged capping on the number of students admitted under the Ten Percent Plan. “Judging people on one criterion is not the way to do admissions policy,” Powers told the New York Times in 2009. The school, he argued, should have the flexibility to consider other factors, such as musical talent or intent to major in fields like engineering and architecture. Four-fifths of the Fall 2008 class at UT-Austin was admitted under the Ten Percent Plan. If that trend continued, Powers said, UT-Austin’s class of 2013 would have consisted entirely of Ten Percent Plan enrollees.

Powers initially proposed limiting automatic admits at 50 percent of UT-Austin’s incoming class. After compromising with urban and rural legislators whose constituents gained greater access, Texas in 2009 capped automatic admits to UT-Austin at 75 percent. UT-Austin today employs not a Ten Percent Plan, but an Eight Percent Plan. Ten Percent students still are entitled to automatic admission to other public schools in the state, including other campuses of the University of Texas and Texas A & M.

Powers frames his argument for restricting automatic admissions to UT-Austin under the Ten Percent Plan as a matter of educational autonomy. In California v. Bakke (1978), Justice Powell’s controlling opinion found this right—grounded in the First Amendment—to be the constitutional foundation of a school’s interest in a diverse student body. This interest in diversity, the only acceptable justification for consideration of race in university admissions, was reaffirmed by a majority of the Court in Grutter. But Powers’s plea may also be driven by economics.

As state appropriations become a smaller part of UT-Austin’s budget, the school has become much more reliant on revenue from tuition. In 1984–85, 47 percent of UT-Austin’s budget came from state funding and another 12 percent from the Permanent University Fund, derived from state oil revenues and dedicated to higher education. Only 5 percent of UT-Austin’s budget came from tuition, which then was $446 a year for residents and $1,437 for nonresidents.

By 2011–12, state funding made up just 13 percent of UT-Austin’s funding, and another 9 percent came from the Permanent University Fund. UT-Austin is actually fortunate in this regard; flagship schools in many other states receive a much lower percentage of their budget from the legislature. Tuition—about $10,000 a year for residents and, depending on the program, $31,000–$36,000 a year for nonresidents—now accounts for 25 percent of UT-Austin’s budget.

Implementation of the Ten Percent Plan at UT-Austin correlates with a sharp decline in students who are not residents of Texas. In 1984–85, 12.7 percent of students attending UT-Austin were out-of-state and another 6.8 percent international. In 1995–96, before the Ten Percent Plan was passed, 12.3 percent of students were out-of-state and 7.5 percent international. By 2011–12, only 4.5 percent of students were out-of-state and 4.7 percent international. While the Ten Percent Plan has produced a substantial increase in the number of Texas residents—from about 80 percent to over 90 percent of the student body—it adversely affects UT-Austin’s tuition revenue. Under conditions of decreased state support, the most obvious way for UT-Austin to raise needed revenue is to increase enrollment of nonresidents to 1984–85 and 1995–96 levels. This would require limiting the mandated admission of Texas residents under the Ten Percent Plan.

Other flagship state universities across the country confront similar tensions in attempts to balance excellence and broad access. Last spring’s firing then reinstatement of President Teresa Sullivan at the University of Virginia, allegedly over the future of online courses; proposals to separate the Madison and Milwaukee campuses from the rest of the University of Wisconsin system; de facto privatization of many professional schools (less than 25 percent of students at the University of Michigan Law School are state residents, and they pay tuition comparable to that of elite private law schools); massive additional budget cuts in the California and Pennsylvania systems—all these provide further evidence of the decisions states must now make. These conflicts likely constitute the most formidable challenges facing current Indiana Gov. Mitch Daniels when he assumes the presidency of Purdue University next January.

If state appropriations for public universities continue to decrease, Texas and other states will face a choice. They can support world-class, de facto private universities attended by an increasingly out-of-state student body; somewhat affordable public universities that continue to provide residents broader access but to an increasingly depersonalized and devalued education; or a hybrid system that awkwardly combines the worst features of both. One way or another, students will end up paying the price.

Frank J. Colucci is Associate Professor of political science at Purdue University Calumet.