The Penn State board of trustees voted Thursday for a $6.8 billion university operating budget with an in-state undergraduate tuition freeze for the second year in a row.
“Promoting affordability in the face of rising costs has not been easy, but we are working hard as a University to maintain and grow the quality of our academic programs, invest in the future, and continue to serve as an innovator in higher education,” said Penn State President Eric Barron in his presentation to the board.
Trustees Chairman Mark Dambly, who also won reelection to his position Thursday, said the board had been “fluidly conversing on (the budget) for over a month.”
“At the forefront of our deliberations and conversations have been our acknowledgment ... on the affordability crisis in higher education,” he said.
For the 2019-20 academic year at the University Park campus, tuition for in-state students will remain $8,708 per semester for freshmen and sophomores, and $9,414-$11,242 per semester for upper-level students, depending on the program. Tuition will increase for out-of-state students, from $16,910 to $17,240 per semester for freshmen and sophomores.
In a press release, the university said the 1.95% increase in tuition for out-of-state students “covers just the cost of inflation and is the lowest increase for out-of-state students attending the University Park campus in more than two decades.”
Penn State increased aggregate tuition two years in a row out of the past four, with a 1.67% increase in 2016-17 and 2.45% increase in 2017-18.
“Thanks to support from leaders in Harrisburg, together with cost savings identified in the university budget, we’re able to present to the board a fiscal plan that keeps resident undergraduate tuition rates steady, while continuing to offer world-class educational experiences for our students,” Barron said.
Barron testified before the state Senate Appropriations Committee in February to ask the legislature to increase its appropriations to Penn State by $19.6 million.
The General Assembly answered in June by passing a state budget with an increase of 2% or $4.75 million in funding for Penn State, a state-related university. That brings the total state appropriations for Penn State to $337.2 million, with a $242.1 million general support appropriation, used mostly to offset tuition costs for in-state students.
The state’s appropriations also included a $4 million increase for Penn College and a $1.1 million increase for Penn State Agricultural Research and Cooperative Extension.
The university’s general fund budget — which includes academic, research, cooperative extension, Penn College and College of Medicine funding — increased by 2.1%, bringing the total to $2.9 billion, according to a university press release. Penn State Health has a $2.7 billion budget.
The other $1.2 billion is made up of federal funds for agriculture, restricted funds that come from private donors usually for research and auxiliary enterprises.
Graduate student stipends will get a 3% bump and the budget also includes a 2.5% pool for “merit-based salary adjustments for faculty and staff,” the university said.
In its budget report, the university identified several areas where it was able to cut $35.5 million to accommodate other increases and level in-state undergraduate tuition. That included both capping and reducing the subsidy for University Outreach, centralizing IT services and “efforts to drive savings in health care costs.”
The budget adds $2.8 million for maintenance and operation of new or remodeled facilities, including Pattee and Paterno Libraries, the Old Main bell tower and other projects at branch campuses. It also adds $4.2 million to cover utility costs for new or newly renovated facilities.
Other increases include an added $8.6 million to compensate for a projected increase in the university’s benefits program and a $2.5 million increase for property and liability insurances.