PSU Board of Trustees approves tuition freeze for all Pennsylvania undergraduates

The Penn State Board of Trustees Committee on Finance, Business and Capital Planning on July 19 recommended a $6.5 billion University budget that includes no tuition increase for all Pennsylvania resident undergraduate students for the 2018-19 academic year.

The proposed budget and accompanying tuition and fees schedule will be considered by the full board on July 20, and if approved, will mark the second time in four years that resident undergraduate tuition has been frozen at all Penn State campuses.

“When the Pennsylvania General Assembly moved to increase the University’s state appropriation by 3 percent this year, it provided the opportunity to present to the board a budget that reflects our commitment as a University to keeping a Penn State education accessible and affordable for the people of the Commonwealth,” said Penn State President Eric Barron. “With this additional state support, and through continued cost efficiencies, this proposed operating budget allows us to keep tuition flat for Pennsylvania students and their families, without compromising the quality of our academic programs. We appreciate the increased state support, and are thankful that champions of public higher education like Sen. Corman and Gov. Wolf continue to support investments in Penn State.”

As part of the University’s commitment to controlling and monitoring costs, the proposed budget includes $36.5 million in cost savings for the coming fiscal year. Including this year’s expense reductions, Penn State has enacted more than $440 million in cuts to recurring costs since 1992, measures that have helped the University meet rising expenses, while keeping tuition increases low or flat.

Tuition and fees

Under the fiscal plan recommended by the committee, in-state undergraduate tuition rates at all Penn State campuses would be held flat for the 2018-19 academic year. At University Park, this means the tuition rate for full-time, lower-division resident undergraduates would remain $8,708 per semester.

For eight of Penn State’s 19 undergraduate Commonwealth Campuses — Beaver, DuBois, Fayette, Greater Allegheny, Mont Alto, New Kensington, Shenango and Wilkes-Barre — the proposal includes no tuition increase for the fourth consecutive year.

Penn State last froze resident undergraduate tuition across the board in 2015-16, followed by modest 1.76 percent and 2.45 percent aggregate tuition increases for Pennsylvania undergraduates in 2016-17 and 2017-18, respectively.

“Access and affordability are top priorities at Penn State,” said Barron. “We must do all that we can to keep the door to a Penn State education open to and within financial reach of the best and brightest students across the Commonwealth. Our increased state support and this tuition freeze is a tangible example of how the University’s land-grant partnership with the Commonwealth directly impacts Pennsylvania citizens.”

University leadership’s commitment to also keeping tuition increases modest for nonresident students is reflected in the plan’s proposed 3.54 percent aggregate tuition increase for out-of-state undergraduates. Full-time nonresident, lower-division undergraduate students at University Park would see a proposed tuition increase of 3.6 percent, or $588 per semester. For the first time, the University is proposing a tiered approach to the nonresident tuition increase at the Commonwealth Campuses, with increases ranging from 2.7 to 3.3 percent, or $269 to $375 per semester, depending on the campus.

In addition, for the fourth year in a row, the student Information Technology Fee would be frozen at $252 per semester for full-time students at all campuses.

The Student Initiated Fee, a combination of the former Student Activity and Student Facilities fees that began in fall 2017, would be $267 per semester for full-time students at University Park, an increase of $9 per semester over 2017-18. The Student Initiated Fee would increase by $4 per semester at most Commonwealth Campuses, and would range from $182 to $240 per semester for full-time students. Two student-run fee boards — one for University Park and one for the Commonwealth Campuses — set and oversee the allocation of the Student Initiated Fee, which supports student-centered activities, services, facilities and recreation to improve student life.

Tuition, fees not the only cost drivers for students

While tuition and fees play a role in determining affordability, Barron emphasized again that these are just two of several important factors that impact the final cost of a degree. Chief among them, Barron said, is the length of time it takes a student to graduate. A student who spends an extra semester or year at Penn State pays far more for the same degree than peers who graduate within four years.

To reduce the time, and ultimately the cost, needed to obtain a degree, Penn State has enacted a variety of initiatives focused on promoting timely graduation, decreasing the rate of student borrowing, increasing student retention and graduation, and decreasing the rate of attrition due to financial challenges.

Among these efforts are the Pathway to Success: Summer Start program, which provides students with a scholarship to take summer classes while earning additional money through on-campus employment; the Student Transitional Experiences Program, which offers financial, mentoring and networking support for students transitioning to University Park from a Commonwealth Campus; the establishment of the Sokolov-Miller Family Financial and Life Skills Center, which provides students with the tools and knowledge for managing money and building sustainable financial practices; and enhancements to student advising through a system known as Starfish to help monitor degree requirements and avoid extra semesters.

Operating budget

Under the proposed fiscal plan, the University’s general funds budget, which encompasses the core academic and teaching-related elements of University operations, as well as the budgets for Penn State Agricultural Research and Cooperative Extension, the College of Medicine, and Pennsylvania College of Technology, would increase by 4.5 percent over 2017-18 to $2.8 billion. Also included in the plan is a $2.5 billion budget for the Penn State Health System, representing a 12.8 percent increase over the prior fiscal year.

The proposed operating budget reflects Penn State’s total $327.4 million state appropriation for 2018-19, which passed the General Assembly and was signed into law by Gov. Tom Wolf on June 22.

Penn State’s general support appropriation, which is used primarily to offset the cost of tuition for Pennsylvania students, increased by 3 percent, or $6.9 million, to $237.3 million.

The University’s state appropriation also includes:

— $53.9 million for Penn State Agricultural Research and Cooperative Extension, representing an increase of 3 percent, or $1.6 million;

— $22.7 million for the Pennsylvania College of Technology, representing an increase of 3 percent, or $662,000; and

— Level funding of $13.4 million for Penn State Health Milton S. Hershey Medical Center.

While the University has a multiyear budget-planning process in place to control and monitor cost drivers, Penn State, like many universities, faces increasing costs for energy and utilities, facilities maintenance, employee health care and retirement benefits, and modest pay increases for faculty and staff members, all of which are reflected in the fiscal blueprint.

The proposed budget includes $24.9 million to address facility and maintenance needs, and increased fuel and utility costs. Barron said the University’s five-year capital plan, which advances critical investments into aging infrastructure and future needs across the institution, remains on pace.

“Even with zero tuition increase for resident students and with increased state support, we are continuing with our capital plan as we assumed we would,” Barron said. “This plan represents a critical investment in the University’s infrastructure, as it imperative that we provide current and future generations of students, faculty and staff with the world-class facilities necessary for continued success.”

The fiscal plan also includes $31.4 million to adequately fund contractual amounts for the labor agreements that apply to Penn State’s unionized technical-service employees and campus health professionals; centrally funded amounts for faculty promotions in the professorial ranks; a 3 percent increase in graduate assistant stipends; and a 2.5 percent pool to provide merit-based salary adjustments for faculty and staff.

In addition, the proposed budget includes $12.8 million to cover projected cost increases related to the University’s benefits program. This includes $8.7 million to cover mandatory cost increases in the employer share of health care for employees, graduate assistants and fellows, as well as an additional $4.1 million for mandatory employer retirement contributions. The budget proposal also earmarks $12 million for meeting strategic needs and to support priorities identified in Penn State’s Strategic Plan, and an additional $4.5 million for student aid and grants-in-aid.

Once approved by the full board, the final operating budget and tuition and fees schedules will be available at