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Penn State Board ratifies lower tuition option

7/17/2009 —

University Park, Pa. -- In a special meeting on July 17, Penn State's Board of Trustees ratified an administrative recommendation to institute the lowest tuition increase in the school's recent history. The figures range from an increase of 3.7 percent to 4.5 percent for undergraduate students depending on campus location and residency status.

The Executive Committee of the Board, elected by board members in January 2009, agreed to implement this tuition schedule proposed Thursday by the University's leadership. The Executive Committee's decision will be presented to the full board for its concurrence in September at the Trustees' regular meeting. Fall semester tuition bills are expected to go out this weekend.

On July 10, the Board of Trustees approved two different tuition schedules because of an uncertain appropriation from the state and a proposed $61 million funding cut from Gov. Ed Rendell. That cut would have set back Penn State to 1997 funding levels, despite the fact that the University is educating nearly 14,000 more students. The board agreed to adopt one of two possible tuition schedules based on the size and timing of Penn State's final appropriation.

At this point, there is still a budget impasse in Harrisburg and Penn State's appropriation is unknown. However, a recent ruling from the U.S. Department of Education and strong support from legislators in both Washington and Harrisburg prompted University officials to move forward with the lower tuition scenario that will provide the most relief for students and their families.

In its ruling, the U.S. Department of Education declared that Pennsylvania must include state-related institutions in the application for federal stimulus funds. Previously, the state was seeking to exclude state-related institutions, like Penn State, from federal dollars provided by the American Recovery and Reinvestment Act. The act, passed this year, specifically says that funding must be made available to public universities to help curb high tuition increases.

"In spite of the risk of setting tuition rates without an appropriation, we are moving forward with the lower tuition option," President Graham Spanier said. "Such a decision is most sensitive to our students and their families."

Implementing the lower tuition amount entails risk because significant additional cuts would need to be implemented if the anticipated appropriation does not occur. In addition to the significant internal cuts already adopted, the University would need to eliminate its planned reserve, reduce employee benefits, implement millions of dollars of additional cuts on very short notice in the midst of the academic year, and levy a mid-year tuition increase.

The adopted tuition scenario results in the following tuition changes:
• A 4.5 percent tuition increase, or $295 per semester, for lower-division University Park students residing in Pennsylvania, and a 3.7 percent tuition increase, or $443 per semester, for out-of-state students;

• A 3.9 percent tuition increase for all lower-division Commonwealth Campus students, which translates to $226 per semester for in-state students at the Altoona, Berks, Erie and Harrisburg campuses, and $217 per semester for in-state students at all other campuses.

"We are making this leap of faith on behalf of our students and we hope that the proposed 18 percent cut from the state is off the table," Spanier said.

Spanier indicated that even with the significant cuts to expenses the University has been making internally — $50 million this year and $200 million over the last 19 years — the possibility of insufficient support from the state could mean the board must re-examine tuition for spring semester.

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