Barron outlines priority of student access, affordability in report to board

July 11, 2014

SCHUYLKILL HAVEN, Pa. -- In his first report to Penn State’s Board of Trustees on July 11, University President Eric Barron offered an in-depth look at one of six priorities he introduced during his first days in office: access and affordability.  

A primary goal at Penn State, he said, is to deliver to students the highest-quality education at a cost that ensures access for Pennsylvania’s citizens. To achieve that goal, several possible solutions exist, chief among them helping students graduate with a degree within four years. 

“The most frequent focus of cost for students is tuition increases, but consider that a 3 percent tuition increase of $16,444 is $492, whereas an extra year of classes is $16,444 -- the biggest of all tuition increases,” he said. “Our first focus should be on the cost of a student’s degree, or the timely completion of a degree; a connected point is attrition due to financial challenges; and we also must pay attention to the growth in student debt.”  

President Barron’s data-driven presentation included comparative tuition and appropriation figures from Big Ten and other public institutions but focused largely on material from Penn State’s Office of Student Aid. 

Penn State and peer institutions have evolved over time to a tuition-driven funding model based on the amount of state appropriation per full-time equivalent in-state student, he noted. Given this reality, positive signs for Penn State include a record number of applications -- 124,000 this year to date -- which indicates that Penn State offers a strong value proposition to prospective students. The number of first-generation college students at Penn State also continues to increase across all campuses, a key indicator of Penn State’s access, and For the Future: The Campaign for Penn State Students raised $514 million for student scholarships. Finally, Penn State students’ loan default rates are more than 2 percent below the statewide average and 3.6 percent below the national average, according to the most recent data available. 

The not-so-good news, he said, is the fact that average student debt continues to grow. Today, 66 percent of Penn State students graduate with some debt -- little change over the last decade -- but during that time the average rate of debt has climbed from less than $20,000 to $35,429. And despite lower-than-average loan default rates, Penn State students’ default rates still have gone up each year, following state and nationwide trends, since the 2008 recession began. 

Over time, the average amount an in-state Penn State student borrows grows from year one to year four, but in years five and six the average amount borrowed jumps significantly. Therefore, President Barron concluded, average student debt could be reduced significantly with the benefit of timely graduation. 

Of course, students pay for college in different ways. For Penn State students whose families make more than $90,000 annually, the expected family contribution toward cost of attendance ranges from a weighted average of 20 percent to more than 60 percent, depending on income, location and residency. However, among students whose family income is less than $60,000, families contribute an average of less than 10 percent toward costs. Despite federal student loans, grants, scholarships, private and PLUS loans, those students face a high percentage of unmet need -- about 30 percent of the cost of attendance for students whose families make less than $32,000 a year. 

One way Penn State students with significant unmet financial need try to make ends meet is by taking on part-time work with a full-time course load. Students who must work excessively are at risk for spending fewer hours in class, experiencing a higher attrition rate, a lower graduation rate, and potentially leaving school with debt and no degree or a degree and higher debt. 

Barron said one solution to help students with unmet financial need is to identify where financial support is available and increase that support. Also, helping students progress toward degrees through advising and careful monitoring of their degree requirements allows students to avoid extra semesters or failure in degree completion. Using resources such as online courses, perhaps with reduced tuition, and better use of classroom space during lower-demand summer sessions at lower costs, are other possibilities he offered to assist students. 

“I propose that we seek resources and focus on several possible solutions to help Penn State students address financial barriers to college completion,” Barron said. “We must think differently about our processes. By helping students face the burden of unmet financial need, offering greater guidance on the path to degree completion and pursuing cost-effective support mechanisms that aid all students, we can help our students identify and avoid unnecessary economic burdens as they achieve their goal of a Penn State degree.” 

Last Updated August 26, 2014