UNIVERSITY PARK, Pa. — Penn State President Eric J. Barron addressed the Pennsylvania House Appropriations Committee on Wednesday afternoon, Feb. 24, sharing with lawmakers how the University has been impacted by the COVID-19 pandemic and how it is successfully navigating current challenges to continue to carry out its land-grant mission of teaching, research and service.
Barron, who was joined in Harrisburg by the leaders of Pennsylvania’s three other state-related universities — the University of Pittsburgh, and Temple and Lincoln universities — also outlined how Penn State plans to use its state appropriation to benefit Pennsylvanians. This includes:
- Continuing to invest in access and affordability efforts to educate the working families of Pennsylvania.
- Investing in innovation to fuel economic growth and student career success.
- Advancing Penn State’s research enterprise while protecting Pennsylvania’s agricultural industry.
- Preparing for the future of learning so that Penn State can continue to provide the outstanding education Pennsylvania families have relied on since 1855.
“We are grateful for the support of the General Assembly and the governor, especially for the increases in our appropriation in recent years,” Barron said. “We have used those increases to fund access and affordability, specialized education and training, agricultural research, and student career success. We look forward to our continuing partnership to help advance our work and fulfill the promise of the land-grant mission to benefit all Pennsylvanians.”
Pandemic impacts and the path ahead
Barron talked to legislators about the toll the COVID-19 pandemic has had on the University’s enrollment and finances, saying that while Penn State has fared better than many institutions, enrollment for 2020-21 is down 1.8%. Likewise, Penn State has experienced an approximately $400 million financial impact across the institution to date, including in Auxiliary and Business Services and Intercollegiate Athletics. This includes $55 million in expenditures to support remote operations and enhance on-campus health and safety, with a significant portion devoted to COVID-19 testing for students and employees.
“As an institution of higher education, we faced unanticipated modest declines in enrollment, increased costs in technology and safety protocols, food and housing insecurity among students, mental and physical health issues, and a loss of liquidity,” Barron said. “Yet, we have worked hard to ensure that the future of Penn State is bright.”
Barron indicated that to offset some of the revenue impact, Penn State has engaged in extensive cost-cutting measures — including salary freezes, hiring chills, unit budget cuts and deferred capital improvement projects — and much-needed innovation dollars have been sacrificed for financial stability.
Barron said that the University has worked hard throughout the pandemic to keep employees whole and lessen the pandemic’s impact on the University’s workforce. He stressed that Penn State remains financially stable, prospective student applications remain at record levels, and with the state’s continued support, the University is currently well positioned to weather the pandemic, adding that he is optimistic about the remainder of 2021.
Penn State’s general support appropriation helps to offset the cost of in-state tuition for more than 50,000 Pennsylvania students across all campus locations, which serve some of the state’s most economically challenged areas. Barron noted that resident students pay approximately $12,500 less for tuition each year than their nonresident counterparts, illustrating that the University is more than doubling the state’s investment on a per-student basis, helping to make a Penn State education more affordable for Pennsylvania students and families.
“Penn State has long worked to make our world-class education available to Pennsylvania’s working families; accessibility and affordability have been top priorities,” Barron said. “The appropriation is a crucial piece of this equation, because it allows Pennsylvania students to pay significantly less than their out-of-state counterparts.”
State appropriations also support Penn State Agricultural Research and Extension operations that translate science-based knowledge into practical solutions for communities and individuals in all 67 Pennsylvania counties; provide important funding for Pennsylvania College of Technology in Williamsport, a wholly owned Penn State subsidiary with a focus on applied technology education; and enhance access to quality health care through the Penn State Health enterprise and College of Medicine.
Penn State has requested a total appropriation of $353.1 million for fiscal year 2021-22, representing a 4.2% increase over the current year’s $338.9 million figure. This includes $249.4 million for the University’s education and general support appropriation; $58.3 million for Agricultural Research and Cooperative Extension; $27.5 million for Pennsylvania College of Technology; $15.6 million for Penn State Health and the College of Medicine; and $2.35 million in new funding for Invent Penn State to support economic development across Pennsylvania.
Pennsylvania Gov. Tom Wolf’s proposed 2021-22 state budget calls for Penn State’s overall state appropriation to remain level for the next fiscal year.
Access and affordability
Barron said that the University and its Board of Trustees have taken aggressive action in controlling the cost of tuition over the last six years, with the across-the-board tuition freeze for 2020-21 marking the third consecutive year — and the fourth time since 2015 — that the in-state tuition rate has been held flat University-wide. Tuition for summer courses was adjusted last year as well to immediately help families in need.
Tuition increases across the University’s campuses have been below national averages for more than a decade, and, when adjusted for inflation, Barron said students are paying less today for a Penn State education than they did five years ago. Of note, Penn State ranks seventh among the 36 public members of the Association of American Universities for the smallest overall increase in in-state tuition over the last 10 years, according to the U.S. Department of Education’s Integrated Postsecondary Education Data System.
Barron has long maintained, however, that tuition is just one component of Penn State’s long-term strategy to address affordability, saying that targeted scholarships, helping students to borrow less, and reducing the overall time to a degree play an even more important role in controlling the cost of higher education and student debt.
Penn State has made student scholarship support a central part of its latest fundraising campaign, and programs such as Open Doors Scholarships, Equity Scholarships, Provost and Chancellor Awards, and Discover Awards are reaching high-achieving students with the greatest need to help them earn their degrees. In addition, the Achieve Penn State initiative was created to help address obstacles students may face on their path to completing their education. These programs are designed to decrease student borrowing, promote the success of need-based students, build financial literacy, and reduce attrition due to financial challenges.
Economic development and student career success
Barron also highlighted the work Penn State is doing to advance statewide economic development, saying that job creation, innovation and entrepreneurship, along with student career success, are key elements of the University’s 21st century land-grant mission.
As part of the Invent Penn State initiative, Penn State has developed and grown 21 LaunchBoxes and Innovation Hubs across the commonwealth, many of which are located in economically underserved areas. Modeled after Penn State agricultural cooperative extension, the Innovation Hubs are open to the community — 96% of Pennsylvanians live within 30 miles of a hub, Barron noted — and provide access to no-cost business startup support, including legal services, intellectual property advice, startup accelerator programs, flexible co-working space and more that complement existing community and business resources.
Since opening on a rolling basis from 2015 to 2018, the hubs have engaged 10,759 students and faculty, supported 3,325 entrepreneurs, graduated 345 startups from accelerator programs, completed 247 product development projects, helped start 164 new Pennsylvania companies, created 433 internships, resulted in 194 newly created jobs, and led to $13.9 million in external and leveraged funds.
By leveraging its size, technology and broad research muscle — University research expenditures reached a record $1.01 billion in 2019-20 — Invent Penn State and the University’s research enterprise are helping to accelerate the transfer of new ideas and technologies and generating new business activity in Pennsylvania.
No entity in Pennsylvania prepares the state’s future workforce like Penn State, Barron said. Approximately 24,000 new Penn State graduates enter the workforce annually, and most make Pennsylvania their home. More than half of all Penn State alumni live in Pennsylvania, and one in 12 Pennsylvanians with a college degree graduated from Penn State. In an October 2019 survey, corporate recruiters ranked universities based on which best trained, educated and prepared graduates for success once hired. Penn State tied with MIT for fifth in the nation.
Furthermore, a recent study found that Penn State contributes $11.6 billion to Pennsylvania’s economy annually, and the University supported, directly and indirectly, more than 105,000 jobs statewide in fiscal year 2017. The study also found that Penn State’s 24 campuses spread the University’s economic contributions into communities across Pennsylvania, in a way that is unmatched by any other university in the commonwealth.
Partners since 1855
The success of Penn State’s work on behalf of the citizens of Pennsylvania relies heavily on state support, Barron said, and the University’s land-grant mission is grounded in the mutually beneficial nature of its longstanding partnership with the commonwealth.
“I very much believe in living the land-grant mission in Pennsylvania,” Barron said. “We’re here in service to society. That has traditionally always been educating the citizens of the commonwealth, but we also have Agricultural Extension that’s making a difference in every single county in the state of Pennsylvania, and we are in our communities helping to drive economic development.”
Barron will next address the Senate Appropriations Committee in April. Lawmakers must agree on a budget and present it to the governor for his signature by the end of the current fiscal year on June 30.