UNIVERSITY PARK, Pa. — Since Penn State’s founding as a land-grant college serving the children of Pennsylvania farmers and laborers, the University has remained committed to providing students of all backgrounds with an accessible and affordable high-quality education.
Along with longstanding efforts to control and monitor costs, Penn State President Eric Barron outlined the University's approach to helping students to borrow less, manage debt, graduate on time and build financial skills while preparing for future careers, in a presentation to the Board of Trustees at its Friday (Sept. 13) meeting.
“For many, a Penn State degree represents an opportunity for lifelong achievement, and we are committed to doing our part as an institution to making this dream an affordable and accessible reality for our students,” Barron said. “By helping them stay on track to their degree, offering sustained academic advising and financial literacy programming, and promoting career success, we can help control the total cost of attendance for our students and have a tangible impact on their ability to thrive as they launch careers and begin their lives after graduation.”
Barron shared that nationally annual increases in student debt are declining steadily, even as more students are borrowing, especially from private lenders. Nationally, 36% of borrowers owe less than $10,000 and 57% owe less than $20,000, while one-third of the nation’s $1.5 trillion in student debt is borrowed by top income holders.
At Penn State, half of all students have loans and 68% receive some type of financial aid. Barron noted that while there’s “little to no difference” in graduation rates between those with and without student debt at the University, borrowing rises as time to degree increases.
Across the nation, those who don’t graduate are three times more likely to default on their loans. However, when compared to their peers in Pennsylvania and other four-year public institutions, Penn State graduates have significantly lower loan default rates.
“Our goal is to help students borrow less and pay back what they do borrow after graduation,” Barron said. “A student who spends an extra semester or year at Penn State will pay far more for the same degree compared to peers who graduate within four years.”
The University has implemented targeted scholarship and award programs that reach students beginning as early as high school and continue through graduation, coupled with measures focused on degree completion; protecting vulnerable borrowers; and educating students about minimizing their future debt.
At the board meeting, Barron provided a snapshot of the impact of these initiatives:
Targeted solutions
In 2019-20, for the second consecutive year, a tuition freeze will save all undergraduate resident students $175 per semester, or more than $12 million total. While the tuition freeze has a wide reach, the Open Doors Scholarship Program and Provost Awards offered at Penn State target specific populations of vulnerable borrowers that typically have lower retention and graduation rates — including low-income, underrepresented, active-duty or veteran, adult, transfer, rural, online, and first-generation students.
In its third year, Open Doors, which is designed to keep students on track to their degrees with financial and other types of support, has already contributed $2.8 million to 1,305 student awardees from 2017 to 2019. Student recipients across Open Doors’ five programs — Smart Track to Success, Pathway to Success: Summer Start (PaSSS), RaiseMe, Student Transitional Experiences Program (STEP) and Complete Penn State — have higher retention rates, higher grade point averages, and lower late drop and withdrawal rates than the comparable population. For example, as part of Complete Penn State program, 332 students in high academic standing in their final two semesters, who had decided they couldn’t finish their degree because of an unforeseen challenge, have now graduated or are on track to graduate thanks to support services and financial support from the University totaling $1 million.
In addition, Provost Awards — which are need-based awards given to high-achieving students — have had a $22.4 million total impact in 2019-20. Since the program began in 2013-14, $109M has been awarded to 13,000 students.
Financial literacy
Financial literacy education is helping to drive success outside the classroom with lessons on educational and consumer debt, mortgages, retirement and more. The Sokolov-Miller Family Financial Life Skills Center provides students with knowledge and skills to manage financial resources across their lifetimes through first-year experiences, self-guided modules, one-on-one counseling and webinars. The center, which was named among the top college financial literacy programs in the nation and number one in the Big Ten in 2019, held more than 200 classes that reached 5,000 students in 2018.
Advising
Advising supports sustained conversations about education and the transition to post-graduate life. The Starfish online advising platform, introduced University-wide in 2015, is continuing to evolve to help students remain on track and avoid extra semesters as they advance in their coursework. The platform enables all academic advisers to monitor student progress, and communicate with and connect at-risk students with valuable services in real-time. In 2018-19, 50,000 students heard from instructors about course progress and nearly 12,000 students scheduled more than 26,000 meetings with instructors, financial aid coordinators, study abroad counselors and others through Starfish.
Career services
As a national leader among large universities for collaboratively managing career services, Penn State offers comprehensive services to help students find jobs. Since 2018, Penn State has used a single, integrated career enterprise system for 37 career units across the University, which enables all students, alumni and employers to post and view career opportunities. As the largest college career operation, students and alumni participated in 17,000 on-campus interviews, 42,898 career coaching sessions, and 73 career fairs with 4,600 employers in attendance in 2017-18.
During the presentation, Barron also highlighted the impactful role philanthropic giving can play to support students, such as a leadership gift to expand the Sokolov-Miller Family Financial Skills Center from the Sokolov-Miller family, gifts to expand programming from PNC and PSECU, as well as 546 endowments from 906 donors to support the Open Doors scholarship programs.
In total, 809 new Open Doors scholarships have been created in the past three years inspired by the matching program. This effort resulted in $188.1 million in endowed student support, which will offer $8.5 million in annual future support once the endowments are fully funded. In total, Penn State has raised more than $330 million in the Open Doors campaign.
“It’s our imperative to keep a Penn State education within financial reach for Pennsylvania students and their families, and especially those from low-income families for whom a Penn State degree can be life changing,” Barron said. “Beyond the cost of tuition, we are striving to be creative in our approach to helping students manage debt and graduate. We know targeted solutions paired with holistic advising, financial education and career services are having a significant impact for our students.”
To view President Barron’s full presentation, visit https://www.psu.edu/ur/newsdocuments/Barron_presidents_report_Sept2019.pdf.