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Penn State Budget Includes Tuition Freeze, Reduced Fall Room and Board Rates

by on July 16, 2020 3:03 PM

Update: Penn State's full Board of Trustees approved on Friday the budget, tuition freeze and reduced fall semester room and board rates.

Original story:

Penn State's Board of Trustees is expected to adopt a $7 billion budget for 2020-21 that includes a university-wide tuition freeze for all undergraduate and graduate students.

The board's Committee on Finance, Business and Capital Planning on Thursday recommended approval of the budget and flat tuition rates, which will go to the full board for a final vote on Friday. 

Room and board rates for the fall, which were previously set in February, also will be reduced because of the university's plan to switch to remote instruction after Nov. 20. For a standard double room and mid-level meal plan, students will see an $803 reduction from the previously approved rates.

Penn State President Eric Barron said in April the university intended to keep tuition flat for all students in an effort to help alleviate some economic burden on students and families stemming from the COVID-19 pandemic. 

“Maintaining the accessibility and affordability of a Penn State education are long-term university priorities, and given the current economic hardships induced by the COVID-19 pandemic, it is particularly important that we not raise our tuition rates for the upcoming academic year,” Barron said in a statement on Thursday. “Despite the challenging fiscal environment across higher education, I’m pleased that we have been able to put forth a University budget that provides a measure of financial relief for our students and supports their continued academic success.”

For Pennsylvania resident freshmen and sophomores at University Park, annual tuition will remain $17,920. For out-of-state students in the same category, it stays at $34,984. It marks the third year in a row tuition has been frozen for Pennsylvania undergraduates.

"It should be noted that this tuition and fee rate applies regardless of the mode of instruction," University Budget Officer Mary Lou Ortiz said during Thursday's committee meeting. "That is whether in-person or otherwise and will not be refunded in the event that instruction occurs remotely for any part of the academic year."

Proposed tuition rates for all levels can be viewed here and will be available at budget.psu.edu following approval by the board.

Tuition rates include the $252-per-semester information technology fee, which in past years was counted as a separate line item. Full-time University Park students also will be charged a student initiated fee — a combination of student facilities and activities fees — of $265 per semester. Student-run boards set and and oversee the allocation of the student initiated fee.

Room and Board

The committee recommended approval of reduced room and board rates for the fall because residence halls will close from the start of Thanksgiving break through the remainder of the semester, which will be completed by remote instruction.

Under the proposed change, a standard double room will cost $2,820, down $607 from the rate approved in February. A mid-level meal plan will cost $2,193, down $256.

Combined, the total would be $5,013, a 14.7% reduction from the $5,876 approved in February.

John Papazoglou, associate vice president for Auxiliary and Business Services, said the semester rates approved in February were converted to daily rates and multiplied by the number of days Penn State will be in the remote learning period to determine the amount to be credited.

Specific rates for each campus, housing option and meal plan, will be available at hfs.psu.edu/rates following approval by the full board.

For now, spring room and board rates are expected to remain unchanged from those approved in February.

Budget

The university's total operating budget includes $7,090,752 in expenditures and $6,965,062 in revenues. The deficit will be funded through university reserves from prior year surpluses.

The total budget is an increase of about $200 million over last year.

Penn State's education and general budget, which makes up 37 percent of the operating budget, is projected to have a $188.9 million deficit. In the overall operating budget, increased revenues in other areas, particularly a $59 million surplus for the Penn State Health System, bring down the total deficit to $125.69 million.

About 72 percent of the education and general budget — $1.87 billion — is funded by tuition and fees. Projected enrollment declines are expected to result in revenue reductions of about $135 million compared to last year.

Auxiliary enterprises — the university's self-supporting activities — show a $34 million revenue decrease compared to last year. Ortiz said this includes a $5 million reduction athletics' revenues with the remainder in auxiliary and business services, particularly in housing and food services and in the hotels. Reduced expenditures, though, result in a $4 million surplus.

Penn State's total operating budget includes a $338.9 million state appropriation: $242.1 million for general support, which is primarily used to provide in-state tuition rates; $54.96 million for agricultural research and Cooperative Extension; $26.74 million for Pennsylvania College of Technology, and $15.1 million for Penn State Health and the College of Medicine.

Pennsylvania's General Assembly and Gov. Tom Wolf approved in May flat funding for the university.

Targeted cost-savings totaling $104 million are built into the budget, including about $30 million from across-the-board 3% reductions for all units, which was announced in April

They also include "savings related to the restructuring of the University’s expenditures under the State Employees’ Retirement System, released debt service, reductions from a plan underway to centralize IT services, and efforts to drive savings in health care costs," according to a university release.

Also previously announced, the budget includes no funds for salary increases, with the exception of $2 million for faculty promotion obligations and associated benefit. It does, however, include $22.8 million to cover projected cost increases related to the University’s benefits program.

"While the budget reflects the university’s best projections and aggressive expense management, contingency planning continues, and we are prepared to be nimble to respond to any future revenue changes, depending on how the pandemic progresses,” Barron said. 



Geoff Rushton is managing editor for StateCollege.com. Contact him at [email protected] or find him on Twitter at @geoffrushton.
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