Task force recommendations could have significant financial impact

UNIVERSITY PARK, Pa. — Recommendations from the Budget Planning Task Force related to tuition and fees could have a $33.8 million impact in the first year, if all of the recommendations were to be adopted, David Gray, senior vice president for Finance and Business/treasurer, told the Board of Trustees Committee on Finance, Business and Capital Planning today (Nov. 21).

Gray emphasized that more discussion needs to take place before any of the recommendations would be implemented, and that the purpose of the presentation was to update the board committee on the work that's been done to date. He did not expect to realize the full projected growth in revenues from the recommendations advanced by the Task Force.

"Considerable additional consultation with various stakeholders, including our students, is still required," Gray said. "This is the starting point for developing a robust and sustainable tuition strategy. For example, raising tuition charged to external funding agencies is something we need to discuss with research faculty and administrators. In general, this committee will need to discuss these recommendations more fully and determine which it may wish to bring forward to full Board for consideration." Gray said it is important to weigh the net revenue impact and optimal sequencing, along with competitive implications for campuses and the University as a whole.

"The overarching view of our committee was that tuition should follow costs and demand a little more than it does," Susan Welch, dean of the College of the Liberal Arts, who chaired the task force subcommittee, said in explaining the recommended changes brought forth by her committee. At the same time, Welch stressed the importance of support for increased financial aid.

"We also have a strong recommendation for financial aid. If you're going to raise tuition at all, you need to provide need-based financial aid," she said.

Some of the recommendations shared with the committee include:

-- Increase base lower-level undergraduate tuition only slowly, in keeping with the practice of the past two years;

-- Institute a $500 per semester differential tuition at the lower level for those colleges with upper-level differentials plus some additional programs;

-- Increase the upper-level differential by an additional $500 per semester in the first year, and an additional $100 per semester in years two through six until the differential is $1,000 per semester higher;

-- Price professional graduate programs to market, differentiating them from the research-based master of arts, master of science and doctoral degrees;

-- Raise tuition charged to external funding agencies for graduate assistants to the in-state graduate rate over the next three to five years. If and when this question is revisited in the future, any assessment should include consideration of the need to keep graduate assistant and post-doc funding in balance;

-- Charge a $750 per semester fee for IUG (Integrated Undergraduate and Graduate) degree students in their graduate year;

-- Impose a fee of $500 per semester and $360 for summer for international students (self-paying only); 

-- Create a more differentiated tuition structure by campus, with base campus tuition dependent on the size and depth of curricula and student services options;

-- Phase out existing field differentials for Level 3, 4 and 5 campuses, except for Abington. Campuses in the different tiers offer significantly different kinds of academic and campus life opportunities. The tiers are based on several factors including enrollment, mission and other factors. Currently, Altoona, Erie, Berks and Harrisburg are considered to be Tier 2 campuses; Lehigh Valley, Schulykill, York, Brandywine, Hazleton, Worthington Scranton and Abington are Tier 3; Beaver, DuBois, Greater Allegheny, New Kensington and Wilkes-Barre are Tier 4; and Shenango is a Tier 5 campus;

-- Add a field differential for bachelor of science in nursing programs in all campus levels;

-- Develop at least a 5 percent tuition differential between Level 2 and Level 3, and Level 4 and Level 5, with a larger differential between the full-service campuses in Level 3 and the special mission campuses in Level 4;

-- Continue the tuition and fee waiver program for employees as is;
  
-- During the next five years, assuming a base increase in the Information Technology fee of $4 per semester, the increase in fees should be $6 per semester, with $2 per semester from University Park students going to the University Park colleges (in addition to the $850,000 already going to them) and $2 per semester from campus students returned to campuses in addition to their regular allocation; and

-- Dedicate some percent, perhaps 5 percent, of incremental undergraduate tuition revenue to undergraduate need-based aid.
  
"The recommendation to create a more differentiated tuition structure by campus already was embraced by the Board of Trustees when they adopted the 2013-14 tuition rate schedule," Gray said.

In explaining the reasoning behind that particular recommendation, Welch, said, "There are significant cost differentials among campuses but not, on the smaller campuses, among fields of study. The sense of our committee was that differential tuition should reflect cost structure, as well as demand structure, and at the campuses that cost structure just isn't there to the same degree as it is at University Park."

Welch said her subcommittee included student representation at both the undergraduate and graduate level. "They were active participants in the committee," she said.

In closing, Gray reminded the committee that this is the beginning of a substantial conversation. "These recommendations inform a process that will help us rethink our tuition strategy for the future, in the context of our institutional mission," he said.

Contacts: 
Last Updated November 21, 2013