Board approves second consecutive tuition freeze for Pennsylvania undergraduates

July 18, 2019

Editor’s note: The Penn State Board of Trustees voted to approve the 2019-20 operating budget and tuition and fees schedules, as outlined below, during its full meeting July 18 at Penn State Brandywine.

MEDIA, Pa. — The Penn State Board of Trustees Committee on Finance, Business and Capital Planning has recommended a $6.8 billion University operating budget for the 2019-20 academic year that includes no tuition increase for all Pennsylvania resident undergraduate students for the second consecutive year. 

The full board will consider the proposed budget and accompanying tuition and fees schedules when it meets later today (July 18) at Penn State Brandywine. If approved, the tuition freeze would mark the third time in five years that Penn State has kept resident undergraduate tuition rates flat University-wide. 

“Promoting affordability in the face of rising costs has not been easy, but we are working hard as a University to maintain and grow the quality of our academic programs, invest in the future, and continue to serve as an innovator in higher education,” said Penn State President Eric Barron. “These goals have been and continue to be top priorities for our Board of Trustees and a focus for my administration.”

Barron noted that Penn State resident undergraduates are actually paying less now, when accounting for inflation, than they did five years ago, as the Consumer Price Index increased by 9.13% from 2015 to 2019, while Penn State’s in-state tuition rate increased by just 5.09% during the same time period.

“Penn State ranks fifth among all 50 state flagship universities for the smallest overall in-state tuition increase over the last decade,” Barron said. “This second consecutive tuition freeze illustrates the University’s commitment to access and affordability.”

In line with Penn State’s longstanding efforts to control and monitor costs, the proposed budget includes $35.5 million in cost savings for the 2019-20 fiscal year. Including this year’s expense reductions, Penn State has enacted $178.8 million in cuts to recurring costs in the last six years alone, measures that have helped the University meet rising costs while keeping tuition increases low or flat.

Tuition and fees

Under the budget plan recommended by the committee, in-state undergraduate tuition rates at all Penn State campuses would remain level for the 2019-20 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 fifth consecutive year.

“As part of our land-grant partnership with the Commonwealth, it is imperative that we do all that we can to keep a Penn State education within financial reach for Pennsylvania students and their families,” Barron said. “Thanks to support from leaders in Harrisburg, together with cost savings identified in the University budget, we’re able to present to the board a fiscal plan that keeps resident undergraduate tuition rates steady, while continuing to offer world-class educational experiences for our students.”

In the last four years, Penn State resident undergraduate tuition has been held level across the board twice: in 2015-16 and again in 2018-19, with modest 1.76% and 2.45% aggregate tuition increases in 2016-17 and 2017-18, respectively.

Penn State’s dedication to affordability for all students is reflected in the plan’s 1.95% tuition increase for all nonresident students, which covers just the cost of inflation and is the lowest increase for out-of-state students attending the University Park campus in more than two decades. Full-time nonresident, lower-division, undergraduate students at University Park would see tuition increase by $330 per semester, with out-of-state tuition increasing between $200 and $229 per semester at the Commonwealth Campuses, based on the University’s campus-specific tuition tiers.

In addition, for the fifth 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 $265 per semester for full-time students at University Park, a decrease of $2 per semester over 2018-19. The Student Initiated Fee would increase by $4 per semester at most Commonwealth Campuses and would range from $186 to $244 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 activities, programs and facilities at the generating campuses.

Tuition, fees only part of the college-cost equation

In addition to containing tuition costs, Penn State has focused on other factors that contribute to the total cost of a degree, such as decreasing the rate of student borrowing, reducing attrition due to financial challenges, and providing resources to help students graduate on time. A student who spends an extra semester or year at Penn State, for example, pays far more for the same degree than peers who graduate within four years, Barron said.

Among the programs underway to help keep a Penn State education accessible and affordable 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 Sokolov-Miller Family Financial and Life Skills Center, which provides no-cost financial counseling and financial literacy programming; the Raise.me micro-scholarship program, a partnership with 24 urban and rural high schools in Pennsylvania where students interested in attending Penn State can earn up to $16,000 in scholarship support over four years; and Complete Penn State, which is designed to help students with high GPAs and credit counts overcome struggles to complete their degrees.

Operating budget

Under the proposed fiscal plan, the University’s general funds budget, which encompasses the core academic and research-related functions of University operations, as well as the budgets for Penn State Agricultural Research and Cooperative Extension, the College of Medicine, and the Pennsylvania College of Technology, would increase by 2.1% over 2018-19, to $2.9 billion. Also included in the plan is a $2.7 billion budget for the Penn State Health System. Overall, the University’s 2019-20 operating budget totals $6.8 billion.

The proposed operating budget reflects Penn State’s total $337.2 million state appropriation for 2019-20, which passed the General Assembly and was signed into law by Gov. Tom Wolf in June.

Penn State’s general support appropriation, which is used primarily to offset the cost of tuition for Pennsylvania students, increased by 2%, or $4.75 million, to $242.1 million.

The University’s state appropriation also includes:

— $54.96 million for Penn State Agricultural Research and Cooperative Extension, representing an increase of 2%, or $1.1 million.

— $26.74 million for the Pennsylvania College of Technology in Williamsport, representing an increase of 17.6%, or $4 million.

— 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, like many universities, Penn State faces increasing costs for energy and utilities, facilities maintenance, employee benefits, and modest pay increases for faculty and staff members, all of which are reflected in the fiscal blueprint.

An additional $16.5 million has been budgeted this fiscal year to address facility and maintenance needs, including the University’s five-year capital plan that runs through 2023, as well as increased fuel and utility costs.

The budget also includes $33 million to fund compensation adjustments, including a 2.5% pool to provide merit-based salary adjustments for faculty and staff; 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; and a 3% increase in graduate assistant stipends.

In addition, the proposed plan includes $8.6 million to cover projected cost increases related to the University’s benefits program. This amount will fund mandatory costs for the increase in the employer share of health care for employees, graduate assistants and fellows. The budget proposal also earmarks $9 million for meeting strategic needs and to support priorities identified in Penn State’s Strategic Plan.

Once approved by the full board, the final operating budget and tuition and fees schedules will be available at https://budget.psu.edu/.

Last Updated July 22, 2019