Penn State University: Penn State leaders discuss budget and tuition at student and family town hall

Penn State leaders answered questions from students and families related to tuition, state funding, housing, the student experience and more during a virtual town hall meeting on Wednesday, Sept. 14. The event — which was accompanied by a similar town hall for faculty and staff — was livestreamed for viewing at all Penn State campuses.

For those who were unable to view the town hall in person, it has been archived at LiveEvents.psu.edu and can be watched below.

Penn State President Neeli Bendapudi hosted the 60-minute town hall and was joined by Zack Moore, vice president for Government and Community Relations; Damon Sims, vice president for Student Affairs; and Sara Thorndike, senior vice president for Finance and Business/treasurer. The event featured questions submitted before and during the town hall and allowed University leadership to share broader context about the factors that are impacting Penn State’s tuition rates and how Penn State is working to reduce costs while still providing students with the highest-quality education and experiences.

“We’ve got to make sure that we keep costs affordable,” said Bendapudi. “That’s not just a nice-to-do. That’s part and parcel of our mission. We are the only land-grant university of Pennsylvania. My own life was transformed because of access to higher education. So containing those costs is very critical.”

Tuition
Knowing how much any tuition increase impacts the finances of students and their families, Bendapudi said that the decision to raise tuition this year was not taken lightly. As the University navigates a challenging post-pandemic fiscal environment in which it is working to reduce a structural deficit that currently stands at approximately $140 million, a number of factors contributed to this year’s tuition increase, including:

Nearly unprecedented inflationary cost increases.
Flat funding from the commonwealth for the third year in a row.
Prior tuition freezes in three of the past five years.
Increased costs, lower revenues and lower enrollments, at least partially due to the pandemic.
Bendapudi noted the University’s deep commitment to access and affordability, which is why Penn State invested $14 million to create new Access Grants to offset this year’s tuition increase for any student — both in-state or out-of-state — with an annual household income at or below $75,000.

“We’ve tried to put as much money back into financial aid as we can, both on a need basis but also for merit and scholarships as well,” added Thorndike.

Both Bendapudi and Thorndike emphasized that Penn State has a strategy to reduce and control costs and enhance revenues so that students and families alone do not have to bear the brunt of cost increases. To arrive at a balanced budget, Penn State has instituted an across-the-board 3% budget cut that will save the University approximately $46.2 million this year; implemented a University-wide strategic hiring freeze through at least summer 2023; and embarked on a comprehensive budget review process to create a new multiyear budget allocation model.

“Our [tuition] increase this past year was a bit higher than it has been because it’s been flat for so long,” said Thorndike. “We are doing everything we can as employees to also reduce our costs, while at the same time not hurting the world-class education that students receive and paying for all of the numerous services that we know are so critically important to our students.”

Thorndike said that Penn State leadership also is working to generate new revenues outside of tuition increases, including exploring corporate partnerships to monetize University assets, and she emphasized that working to increase enrollments, particularly at the Commonwealth Campuses, is a top priority.

Commonwealth Campuses
Bendapudi reiterated the University’s commitment to its Commonwealth Campus structure and said that there are no plans to close any campuses, saying she wants to leverage the opportunities that exist at the Commonwealth Campuses to both grow enrollments and to meet the state’s workforce needs.

“One of the reasons I took this job was how complex Penn State is and how unique. We truly are unique among institutions of higher education in the United States,” said Bendapudi. “Ninety-six percent of the citizens of our commonwealth live within 30 miles of one of our locations. … I have seen firsthand how important the Commonwealth Campuses are. It’s not just for education, but they are the social, economic and cultural centers of the communities they serve.”

Student experiences and resources
Several questions focused on the student experience at Penn State and how it might be impacted by efforts to reduce and control costs. The University offers a variety of co-curricular experiences, including student activities, student organizations, and engagement opportunities, and senior leaders said that access to those opportunities is not changing.

“This is my 15th year as vice president for Student Affairs at Penn State, and the one thing that has struck me most throughout that time is just how rich the experience for students is both in the classroom and outside the classroom,” said Sims. “I think we’re extraordinary as a university in the way we are able to do both of those in a complimentary fashion and offer a very robust, just extraordinary, student experience at all locations. I think because of that it is critically important that despite the challenges that Sara and Neeli have described, we sustain that commitment to the experience outside the classroom.”

Sims said access to basic needs that are fundamental to student success — such as medical care, counseling services, and food and housing resources — will not change, and the University actually will be making investments in areas where more help is needed.

“We have food pantries at every location,” said Sims. “We have expanded the food pantry at University Park with support from a variety of sources and donors. We have LiveOn housing grants that are available to students that have really been very, very helpful for those who have housing insecurities. This is an example of where we’re being strategic in response to this budget challenge because we’ve had to increase staff in Student Care and Advocacy. We have hired some new case managers and other staff members who are focused pretty acutely on this issue and providing support to students both at University Park and on the Commonwealth Campuses.”

Housing
Leaders also addressed questions about on-campus housing, specifically the number of students in supplemental housing, concerns about living conditions in light of students paying more for tuition, and concerns that the University over-admitted students to help generate additional revenues.

It is important to note that Housing and Food Services is self-sustaining, and tuition dollars are not used to fund housing operations. The size of incoming classes fluctuates from year to year, and it is not always possible to predict which students will accept the University’s offer of admission. While the use of supplemental housing was necessary to accommodate the number of students who expressed a desire to live on campus, Penn State is dedicated to the safety and well-being of everyone at the University.

Supplemental housing rooms are large spaces fully converted into permanent living quarters, located within existing university residence halls. The rooms offer the same amenities as a regular room, including a bed, desk, drawers, space for clothing, Wi-Fi, and refrigerator. Like all housing on campus, supplemental housing operates within local code requirements, including occupancy limits and fire safety compliance. As space is adapted for supplemental housing, it is reviewed by Environmental Health and Safety and the safety officer within Auxiliary and Business Services to affirm it complies with all requirements.

Thorndike said that Housing staff make every effort to provide all students with a clean and comfortable on-campus living experience — and to address any concerns or issues quickly.

“Our supplemental housing rooms are set up just like regular residence hall rooms,” said Thorndike. “They’re large spaces, they’re equipped with furniture, we go in and we make sure that they’re safe, that they follow code compliance, that they touch up paint or make it warm and cozy as much as possible. We believe that any questions we’ve had or concerns have been resolved, but by all means, if you’ve got remaining concerns, please reach out to the Housing operations office or to the Residence Life staff, so that we can resolve any concerns that you have.”

State funding
With tuition and state funding comprising the two primary revenue streams to fund the University’s education budget, Penn State is always advocating for increases to state support, as state funding directly impacts tuition.

With state funding lagging inflation over the last decade, the lack of regular increases in Penn State’s state appropriation has only intensified the pressure on the University’s tuition rates.

“We have been operating at sub-inflationary rates for the last decade, both in appropriations and in tuition, even including the most recent tuition increase,” said Moore. “We are still below 2010 funding levels from the commonwealth of Pennsylvania, and our students receive less than any other public university on a per-student basis, $2,500 less per student than the next lowest public university in Pennsylvania. We continue to work on this and we continue to advocate for increases. We need everyone’s help, though. This is a very complex problem at the state level in particular with regard to budgets and budget pressures on the state. And so we need everyone’s help in attacking this challenge.”

Moore noted that students and parents are among the University’s best and most important advocates, as they share powerful stories of how important Penn State is to them, their families, and their communities.

To increase the University’s advocacy base — and to strengthen Penn State’s voice in Harrisburg in support of increased state funding — Moore encouraged all students, families and alumni to join Penn State’s advocacy efforts by visiting advocate.psu.edu.

While a number of questions were addressed during Wednesday’s town hall, stay tuned to Penn State Today for additional coverage on other topics and questions around the University’s budget.