Penn State Intercom......May 9, 2002

Tuition Task Force
report calls for
new tuition model

The University's Tuition Task Force recently completed 10 months of work with a report that calls for phasing in larger tuition increases beginning with the incoming freshman classes in 2003 and 2004.

Current students would avoid a portion of the increase.

The report also suggests a greater differential between upper- and lower-division students and an increased differential between the University Park campus and the University's other locations.

The Task Force was appointed in July 2001 by President Graham B. Spanier to recommend a framework for tuition in the future. Rodney Erickson, executive vice president and provost, chaired the committee and presented its findings to the University Faculty Senate.

"In every comparative study undertaken, Penn State is significantly underfunded relative to its peers within Pennsylvania and across the country," Erickson said. "While no one likes a solution that raises tuition, if the University is going to remain a premier institution we simply must generate additional revenue to narrow the gap that exists between Penn State and its competitors. We believe this approach is the most equitable, since it will give new students more than a year to prepare for the change, and will moderate the increases that current students would see."

The report was released as Penn State faces a proposed $17 million permanent budget reduction from the state for next year. That proposed reduction follows a $10 million mid-year recision in the current year. The report points out that Penn State receives less money per student than any other public university in Pennsylvania and less than any other Big Ten institution.

Spanier noted that Penn State is one of the most efficient universities in the nation, and that the University has internally cut and recycled more than $87 million over the past 10 years.

"We simply can't cut our way to quality," said Spanier. "To move the University forward and to ensure the very best education for our students, we need a new funding model, and that is what this report provides."

Under the plan proposed by the Task Force, students in the fall of 2002 all would receive the same percentage increase. Beginning with in the fall of 2003, differential tuition levels would be implemented by student level and by location, as follows:

* Incoming freshmen would receive a higher increase in 2003-04 and again as sophomores in 2004-05, with incoming freshmen in 2004-05 also paying this higher rate.

* The existing differential for upper division and graduate students would be increased over two years.

* University Park students would receive higher increases than students at other locations.

The report proposes that University Park freshmen pay an additional $400 to $600 over the base tuition for returning students in fall 2003, with a similar increase also applying in the fall of 2004. Freshmen at other locations would see an additional increment on top of the base tuition in the $50 to $100 range each of these years.

The differential between upper and lower division students is recommended to increase at all campus locations by $180 in each of the 2003 and 2004 years.

Tuition rates for fall 2002, which are unaffected by this report, will be set by the University's Board of Trustees at the July meeting.

The Task Force recommends adding $1 million to the University's financial aid pool to help offset the tuition increases, and to add an additional $1 million in each of the next five years. Approximately three-fourths of all Penn State students currently receive some sort of financial aid.

Last year Penn State students received more than $482 million in financial assistance from federal, state and University sources including scholarships, grants and loans. Spanier has said that no student should be excluded from Penn State due to a lack of personal financial resources.

The full report is available on the University's Web Page at http://www.budget.psu.edu/tuition.

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