Penn State Raises Tuition, but Not for Families Earning $75K or Less

Update: The full Penn State Board of Trustees on Friday, July 22, approved the proposed tuition schedules and a 2.5% general salary increase for faculty and staff by a vote of 26-6. Alumni-elected trustees Ted Brown, Alvin de Levie, Barry Fenchak, Anthony Lubrano, Jay Paterno and Alice Pope voted no. Pennsylvania Department of Conservation and Natural Resources Secretary Cynthia Dunn and Acting Secretary of Education Eric Hagarty, both of whom are ex officio members, abstained.

Original story:

Penn State’s tuition cost is expected to rise for the second consecutive year, but university administrators said on Thursday that students from families earning $75,000 or less will receive grants to offset the increase and keep the rate flat in 2022-23.

The Board of Trustees Committee on Finance, Business and Capital Planning recommended approval of a plan that will increase tuition at the University Park campus by 5% for Pennsylvania resident undergraduates and 6% for non-Pennsylvania residents. Tuition at the Commonwealth Campuses would increase by 2% for in-state undergrads and 3% for out of state.

For freshmen and sophomores in-state students at University Park, that means a $918 increase, bringing tuition for the 2022-23 academic year to $19,286. Out-of-state freshmen and sophomore tuition would increase by $2,156 to $38,102. Dollar increases and annual tuition vary at other campuses.

Junior and senior dollar increases at University Park vary by major from $990 to $1,178 for Pennsylvania resident students and $2,266 to $2,548 for out-of-state students.

Both Pennsylvania resident and out-of-state undergraduates who have completed a Free Application for Federal Student Aid (FAFSA) and are from families earning less than $75,000 will receive Access Grants in the amount of the increase. The threshold was chosen because it is above both the national median income of $67,521 and Pennsylvania median income of $63,627, Penn State President Neeli Bendapudi said.

About $14 million for the grants will be included in the 2022-23 budget, which Senior Vice President for Finance and Business Sara Thorndike said will cover the increase for every degree-seeking undergraduate. A Penn State spokesperson did not immediately respond to an inquiry about whether the grants would continue beyond this year.

Students are urged to complete a FAFSA as soon as possible if they haven’t done so already to ensure they are eligible.

Tuition also would increase by 6% for graduate students and 5% for World Campus students.

The Student Initiated Fee, which is set and allocated by two student-run boards, also would increase by $19.48 per year, to $549.48, for full-time students at the University Park campus. Fee increases at other campuses range from $5 to $8.

The full board will vote on the tuition schedules during its meeting on Friday.

“I do want to make two comments,” Bendapudi said during the committee meeting on Thursday morning. “One, we are doing everything we can to keep this affordable, so you will see for any student whose family income is below the median for Pennsylvania and the United States, we are promising no tuition increase this year compared to last year.

“The second thing is, you hired a former banker and a businessperson to be president, so I commit to you that over the next few years, we will come to a balanced budget because we need to make those incredible investments that we all believe in. We have urgency about this, not panic. We are a solid system but we will act with urgency.”

The University Park tuition increase would be the largest announced to date this year by major public universities, according to information provided to the board. It also maintains Penn State’s position as the most expensive public school for in-state tuition in the Big Ten and second-most expensive in Pennsylvania, behind Pitt, which announced a 3.5% increase last week.

Penn State receives the lowest per-student commonwealth funding of the four state-related universities, which also include Pitt, Temple and Lincoln.

Bendapudi and Thorndike cited a list of financial challenges facing the university that played a role in the overall increase.

The university froze tuition for three consecutive years until a 2.5% increase last year and has had flat funding from the state for three consecutive years.

“We are grateful we are flat funded but we had candidly hoped for some increase from the state as well,” Bendapudi said.

Enrollment declines, due to both COVID-19 and national demographic trends, have continued over the last several years; and the university had about $330 million in net expenses and revenue losses resulting from the pandemic; and, like every other business, Penn State is dealing with high inflation and a competitive labor market, Thorndike said.

“I also want to say that although we do have some budget challenges, we have a very healthy balance sheet,” Thorndike said. “We have strong ratings from Moody’s and S&P with stable outlooks.”

Trustee Valerie Detwiler said she was concerned that the $75,000 household income threshold for the tuition increase offsets was too low and asked how students caught in the middle would be helped.

“If you are a family that’s a mom and a dad with two kids, $75,000 a year doesn’t really help those kids go to school,” Detwiler said. “So how are we going to help those kids in the middle, which is a constant issue and I feel like through our proposal is kind of leaving them out yet again. How are we going to help the kids in the middle that don’t meet our income threshold for need but don’t have resources available to help them. They get lost. What is our strategy for those kids? I think it’s crucial that we talk about them because there’s lots of Pennsylvanians that are in that segment.”

Bendapudi responded that the threshold covers more than half of Pennsylvania households. About 20,000 Penn State students have completed a FAFSA indicating family income below $75,000, representing about 40% of all university students who filled out the application and about 28% of the total undergraduate population.

“While it’s imperfect, we’re trying to say it’s not just the lowest Pell-grant eligible… we’re trying to catch the teacher, the nurse that’s trying to put that child through school as well,” Bendapudi said.

The proposal also includes a 2.5% general salary increase for faculty and staff. Thorndike said the university is currently conducting a compensation study.

“We know that the proposed general salary increase is quite modest at 2.5 percent and we do want the employees to know how important they are to us,” she added.

The committee voted 11-1 to advance the tuition and salary increase proposal to the full board, with Trustee Anthony Lubrano voting no.

Penn State’s full Board of Trustees will meet at 1 p.m. on Friday at the York campus.