Editor’s note: The Penn State Board of Trustees voted to approve the 2021-22 operating budget and tuition and fees schedules, as outlined below, during its full meeting on July 15.
UNIVERSITY PARK, Pa. — The Penn State Board of Trustees Committee on Finance, Business and Capital Planning has recommended a $7.7 billion University operating budget for the 2021-22 academic year that includes a 2.5% tuition increase for Pennsylvania resident undergraduates.
The proposed budget and accompanying tuition and fees schedules will now go to the full board for a final vote this afternoon (July 15). If approved by the board, resident undergraduate tuition would increase for the first time since the 2017-18 academic year, following three consecutive years of tuition freezes. Even with this year’s increase, when adjusted for inflation, tuition remains lower than it was 10 years ago.
“Controlling the cost of a degree has been a primary point of emphasis during my tenure as president and a priority for our board,” said Penn State President Eric J. Barron. “Our efforts to keep a Penn State education accessible and affordable have placed us among the top tier of public flagship universities for the smallest overall increase in in-state tuition over the last decade. We always strive to support our students first by keeping tuition increases low or flat, and this year’s modest rise, though necessary to keep up with inflation and the University’s own rising costs, was held to the lowest percentage possible while still allowing us to deliver the world-class academic and student experiences that make Penn State so special.”
Tuition and fees
For the coming academic year, all Pennsylvania resident undergraduate students at all campuses would see tuition rise by 2.5%. At the University Park campus, lower-division resident undergraduate tuition would increase by $224 per semester, to $9,184, while lower-division resident undergraduates at the Commonwealth Campuses would see tuition increases ranging from $162 to $184 per semester, depending on the campus.
All nonresident undergraduate students and all graduate students, regardless of residency status, would see tuition increase by 2.75% for 2021-22. At University Park, lower-division nonresident undergraduate tuition would rise by $481 per semester, to $17,973. Lower-division, nonresident undergraduates at all other Penn State campuses would see tuition increases ranging from $294 to $336 per semester.
The Student Initiated Fee would remain flat for the next academic year at $265 per semester for full-time students at the University Park campus. The Student Initiated Fee would increase by $1 per semester at most of the undergraduate Commonwealth Campuses and range from $192 to $250 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 each of the campuses.
University operating budget
The $7.7 billion fiscal plan includes a $3.4 billion operating budget for the Penn State Health enterprise and $2.9 billion for the University’s general funds budget, which encompasses the core teaching and research-related elements of University operations, as well as the budgets for Penn State Agricultural Research and Cooperative Extension, the College of Medicine, and Pennsylvania College of Technology. Due to the ongoing impacts of the COVID-19 pandemic and the planned use of prior-year balances to honor multiyear strategic commitments, the University is projecting a $166 million deficit in the 2021-22 general funds budget, which will be offset by reserve balances.
The budget is inclusive of Penn State’s 2021-22 state appropriation, which passed the General Assembly and was signed into law by Gov. Tom Wolf in June. State support remains level for the next academic year and includes $242.1 million for the University’s general support appropriation, $54.96 million for Penn State Agricultural Research and Extension, and $26.74 million for Pennsylvania College of Technology.
“Even with the challenges presented by the pandemic, Penn State remains on solid financial footing,” said Barron. “Continued strong enrollment projections, healthy reserves, an excellent credit rating, and the support of our state and federal leaders have allowed the University to weather the last 18 months and set us on a course to emerge from the pandemic from a position of strength.”
As part of Penn State’s longstanding commitment to controlling and monitoring costs, the 2021-22 budget reflects cost-saving initiatives totaling $39.4 million. This includes savings of $3.5 million from the University’s restructuring of its State Employees’ Retirement System expenditures and $2.7 million from a plan that is underway to reduce institutional information technology costs. An additional $22.2 million in savings will be realized from a 2% across-the-board reduction of unit budgets. The University also plans to identify another $11 million in savings or additional revenues throughout 2021-22.
To help address access and affordability and to continue to support students in need, the budget includes a $10 million increase in student aid. The University also has budgeted $12 million for strategic needs and to support innovation initiatives to advance the thematic priorities in Penn State’s Strategic Plan.
In recognition of the hard work and dedication displayed by the University’s workforce to meet the many challenges brought on by the pandemic, the proposed budget includes $24.7 million to fund a 2% pool for merit-based employee salary adjustments as well as contractual salary increases, and an additional $2.8 million has been budgeted for faculty promotions and related benefits. The plan also includes $13.7 million to cover projected cost increases for the University’s benefits program — $13.3 million of this amount would fund mandatory increases in the employer share of health care for employees, graduate assistants and fellows, and an additional $400,000 would cover increases in employer retirement contributions. A total of $1.3 million has been budgeted for increased costs of grants-in-aid, primarily for graduate assistants, fellows, employees and dependents.
To meet other rising operational costs for the coming fiscal year, the University has budgeted $4.8 million for property and liability insurance increases and $13.1 million to address facility and maintenance needs, which includes $9.1 million in debt service related to the 2019-2023 capital plan; $2.7 million for the maintenance and operation of new or newly remodeled facilities; and $1.3 million for anticipated fuel and utility cost increases.
The final operating budget and accompanying tuition and fees schedules will be available at https://budget.psu.edu/ once they have been approved by the board.