Board of Trustees

Trustees considering tuition increase for students

Penn State students could see a 2.45 percent increase in tuition next month.

The university trustees’ finance and capital planning committee approved the 2017-2018 budget and tuition Thursday. That budget provides for a $2.058 billion general fund. To make that work, tuition would need to be increased, officials said.

The proposed average increase for Pennsylvania residents covers a higher number, 2.74 percent at University Park campus, and a freeze at eight other campuses — Beaver, DuBois, Fayette, Greater Alleghenies, Mont Alto, New Kensington, Wilkes-Barre and Shenango.

A similar split increase was implemented last year. An across-the-board tuition freeze for in-state students was put in place in 2015.

Non-residents would go up by 3.85 percent.

This is the second time in three years that Penn State has been forced to plan in July for a coming school year without knowing exactly what the state’s contribution would be.

“We have moved ahead with our proposed budget despite the uncertainty of our appropriation because the operations of the university must continue, as well as our commitment to students and their families,” President Eric Barron said. “If necessary, we will adjust our fiscal plan as we learn more from the commonwealth. However, this is not something that is easily accomplished and would carry with it serious impact, not only to the educational mission of Penn State and affordability for our students, but also to our research and extension efforts, as well as our clinical operations in Hershey.”

In 2015, the state had not passed a budget by the time Penn State was meeting to pass its plan. That budget didn’t come until the following spring. Pennsylvania does have a budget this time, just not a way to fund it yet.

“We are hopeful the legislature will resolve its challenges soon and continue its pledged support to higher education for its citizens,” Barron said.

The university’s increases include a $12.5 million increase in health care benefits and a $14.8 million increase in mandatory contributions to state retirement. According to Penn State, that retirement contribution translates to just more than 1 percent of the tuition increase.

The university achieved $21 million in expense reductions and reallocation. Tuition makes up 79.2 percent of the general fund. It is 31 percent of the university’s overall budget, eclipsed only by the 39 percent that comes from the Penn State Hershey Medical Center and related facilities.

Pitt and Temple are state-related universities like Penn State, but do not participate in state retirement. About one third of Penn State employees elect to participate in state retirement.

Pitt implemented a 2.5 percent increase on Monday. Temple set its own 2.49 percent increase last week.

The Pennsylvania State System of Higher Education covers other state schools, such as Lock Haven and Clarion. Its Board of Governors approved a 3.5 percent increase last week.

Full board approval is still required. The board meets Friday.

Lori Falce: 814-235-3910, @LoriFalce