How state funding impacts Pennsylvania students, families

UNIVERSITY PARK, Pa. — If Pennsylvanians need a concrete example of how Penn State uses state funding, they need to look no further than the University’s in-state tuition rate. 

Through its partnership with the commonwealth, Penn State receives state funding annually to advance its mission of educating the citizens of Pennsylvania. Known as the general support appropriation, Pennsylvania students are the direct beneficiaries of these state dollars, which make it possible for Penn State to offer an in-state tuition rate that provides significant cost savings each year for resident students and their families.

The general support appropriation is applied entirely to Penn State’s Education and General (E&G) budget, which supports the University’s core teaching mission. Penn State then uses the state funds to pay for expenses associated with educating students, such as faculty and staff salaries, technology, utilities, and facilities upkeep. With state funds helping to cover a portion of these costs, it allows Penn State to lower the cost of tuition for Pennsylvania students.

Last year, Penn State received $242.1 million from the commonwealth for its education mission. Divided evenly among the University’s 45,000 Pennsylvania resident undergraduates, each student received approximately $5,400. Despite this being the lowest per-student appropriation of any public university in Pennsylvania and well below the national average, Penn State took that $5,400 and more than doubled it, with Pennsylvania undergraduate students paying approximately $13,300 less per year for tuition, on average, than their nonresident peers.

In other words, as part of its commitment to keeping a Penn State education affordable for Pennsylvania’s working families, the University provided an additional $355 million in tuition savings for resident students over and above the state appropriation — for an aggregate in-state tuition discount of nearly $600 million for all Pennsylvania resident undergraduates across all 20 undergraduate campuses.

“The value that we are able to add to the state appropriation is emblematic of Penn State’s commitment to our land-grant mission and to the students and communities we serve,” said Nick Jones, Penn State executive vice president and provost. “We do this because of our belief in providing an accessible and affordable education for Pennsylvania students from all walks of life and in every corner of our state. We are truly partners with the commonwealth, and the state’s investment, paired with our own, go hand in hand.”  

In-state tuition is especially critical to Penn State’s 20 Commonwealth Campuses, where 80% of the approximately 25,000 students are Pennsylvania residents. The University’s Commonwealth Campus structure is unique in higher education, as 96% of Pennsylvanians live within 30 miles of a Penn State campus, providing affordable and convenient access to a world-class education from anywhere in the state.

"In-state tuition has played an enormous role in my decision to attend Penn State, particularly deciding to attend Penn State Lehigh Valley, where I began my degree,” said Hibah Akbar, a fourth-year student from Bethlehem, Pennsylvania, who is scheduled to graduate this spring with a degree in biobehavioral health. “The tuition rate at the Lehigh Valley campus allowed me to receive a high-quality, research-intensive education while staying at home and commuting to campus, at a cost that was lower than any other four-year school in my area.”

Akbar, who aspires to continue her education in medical school after graduation, has been an active participant in student government at Penn State, which started during her first year at the Lehigh Valley campus. She is currently the vice president of the Council of Commonwealth Student Governments, after serving as the body’s president during the last academic year. Akbar said the financial flexibility afforded by the lower cost of in-state tuition has enabled her to make the most of her Penn State experience.    

“The in-state tuition rate, made possible by state funding, has impacted me personally by allowing me to utilize the money I’ve saved on tuition to purchase books, homework materials, and office supplies that have made the difference between struggling and succeeding at Penn State,” she said. “The cost of the degree is not limited to tuition, and the current tuition plan has successfully allowed for flexibility and affordability that has had a direct positive impact on my education. I don’t think I would be attending classes at Penn State if not for state funding.”

Penn State offers a differentiated tuition structure at its Commonwealth Campuses that adjusts tuition rates based on campus location and size, which, when combined with the savings already afforded by the state appropriation, makes higher education possible for low- and middle-income students and families in many Pennsylvania communities. 

“Penn State’s campuses are valuable regional assets,” said Kelly Austin, interim senior vice president for Commonwealth Campuses and executive chancellor. “Not only do they provide access to a top-quality education that is affordable and within practical commuting distance for tens of thousands of Pennsylvanians, but they’re also key cultural centers and employers that contribute to the economic health and quality of life in communities across the state.

“With our Commonwealth Campuses primarily serving Pennsylvania students, the state appropriation is absolutely critical to our students’ bottom lines, to the future success and vibrancy of the communities we serve, and to our decades-long model of delivering access to a Penn State education in a geographically distributed fashion across the commonwealth.”  

Jones noted that the University’s endowment, while valuable in helping to offset the cost of attendance for students via endowment scholarship programs, endowed professorships, and support for other educational expenses, is not an alternative to the state appropriation, as some have suggested.

“Penn State’s endowed funds are restricted and can only be used for the specific purpose designated by the donor, meaning we could not use these funds to offset state funding even if we wanted to,” Jones said. “Many endowments also require that Penn State maintain the gift’s principal and use only the returns generated, so that the gift remains available in perpetuity for its intended use.

“In truth, there is nothing that could adequately replicate a direct state appropriation and the positive impact it has on our students and the University’s current model, which has benefited Pennsylvanians for generations.”

Editor’s note: This is the second in a three-part series examining Penn State’s state funding.