Student debt in Pennsylvania is the third highest in the nation. Meanwhile, tuition at public universities has steadily risen as state funding has year after year either stayed flat or, in the case of budget cuts made under former Gov. Tom Corbett, dramatically decreased.
There’s an undeniable correlation here. State funding to public universities is largely meant to subsidize tuition for in-state students and fund basic operations of higher education. Four colleges in Pennsylvania have a special “state-related” designation, meaning they depend less upon state funds than others, but lean on it to keep costs down for more than 100,000 in-state students.
Those state-related schools — Penn State, Pitt, Temple and Lincoln — may have little choice but to hike tuition as the state budget impasse continues in Harrisburg. That’s because the $600 million appropriations to these flagship universities are in a standalone bill that was blocked by House Democrats in January.
So though some schools have been partially funded for the 2015-16 fiscal year, Penn State, Pitt, Temple and Lincoln have gotten nothing.
“Our standalone appropriation bills have become the latest bargaining chip in a protracted political fight,” presidents of the four universities wrote in an op-ed appearing in newspapers across the state, adding: “Without those funds, our universities would be forced to replace nearly $600 million from other sources. It doesn’t take much imagination to envision the impact on our students.”
Officials from the state-related universities say they’re still banking on, at some point, receiving the funds appropriated to them for the 2015-16 fiscal year. But in preparation of what could be a disastrous worst-case scenario — not receiving any — the schools are working through cost-cutting measures and brainstorming ways to increase revenue.
The one tried and true way of increasing revenue today? Tuition hikes.
State funding and tuition increases
Tuition at these four state-related schools has long been tied directly to state funding. The relationship between the state and the universities grew the most tense in 2011 when Gov. Tom Corbett proposed slashing 50 percent of their state appropriations. In the end, the legislature agreed to a 19 percent reduction that was still considered to be one of the largest education funding cuts in history.
Today, Pitt, Penn State and Temple are among the most expensive public universities in the country, with Pitt at No. 1 in the country in it the category of in-state tuition and fees, according to U.S. News and World Report. And Pennsylvania is in the top five states in the country that has decreased its higher education funding the most since before the recession.
Pitt threatened to abandon its state-related status in 2012 and turn into a private entity as state funding floundered. The appropriations conversation to these four schools is a contentious one, year after year. And the situation may be the most serious at Lincoln University, the nation’s first historically black college, where state appropriations represent a quarter of its revenue.
Gov. Tom Wolf, a Democrat, was elected in 2014 on a platform of restoring cuts made to education and the state-related schools were expecting a 5 percent increase in funding for the 2015-16 school year. It hasn’t come through.
This graph shows how state appropriations to the four state-related schools stayed largely stagnant after the 19 percent cut in appropriations in the 2011-12 school year, resulting in tuition increases at all four schools. This chart shows the appropriations (in thousands):
Despite the giant slash in 2011, the state appropriation to state-related universities has been steadily declining since the 1970s. For example, in 1970, state funding represented 62 percent of Penn State’s overall operating budget. Today, it represents 13 percent. This graph created by Penn State shows the relationship of the appropriation with tuition:
Since 2011, tuition has increased at all four locations, the highest increases coming following the large cuts of 2011-12. That year, Temple students took on a 10 percent tuition hike that correlated with a $1,200 per year increase in tuition for in-state students. For context, just 10 years ago in the 2005-06 school year, tuition for in-state students at Temple was $9,140. At Penn State it was $11,024 and at Pitt it was $10,736. Each have increased by about $5,000 since that time.
Here’s a look at how base tuition for in-state students at each of the four state-related schools has changed since the 2010-11 school year:
The trajectory of student debt has followed a similar pattern. Pennsylvania ranks third in the nation for student debt, with some 70 percent of students coming out of school with an average of $33,264 owed in 2014, according to the Institute for College Access and Success.
The average debt for Pennsylvania students is up more than $13,000 from just ten years prior. At that time, the average student graduated from a Pennsylvania college with $19,556 in debt.
Planning for the worst
The argument against increasing funding to some of these state-related schools has always been that, despite cuts to funding over the decades of their relationship with the state, the schools continue to thrive. Penn State has taken on large expansion projects on its main campus and still operates more than 20 branches. Temple is taking on a new library project and is considering funding an on-campus football stadium. Meanwhile, state funding represents less than 20 percent of the overall operating budget for Pitt, Penn State and Temple.
But Temple spokesman Ray Betzner says the funding of capital projects and the money that helps in-state students pay their tuition comes from totally separate pots. In the last several years, despite rising enrollment at Temple, the university’s operating budget has raised by just 1.8 percent, which is lower than the rate of inflation.
So these schools say they’re still assuming they’ll get their 2015-16 money. But there’s of course a contingency plan.
“We’ve been really great at holding down tuition increases,” Betzner said. “It will be impossible to continue to do that if we do not get a commonwealth appropriation.”
Penn State spokeswoman Lisa Powers said in light of the budget standoff in Harrisburg, the school is holding a percentage of all unit expenditures and has stopped all non-vital business travel and expenses. She also said the university asked all its colleges — including its satellite campuses across the state — to go through contingency planning to look at delaying capital projects and other cost-cutting measures.
For the first time in nearly 50 years, Penn State froze tuition across all campuses for the 2015-16 year. University President Eric Barron had expressed an interest in freezing tuition at the state-related school again for the 2016-17 school year (a rate which will be voted on by the university Board of Trustees in July), but that aspiration was based on the state restoring the cuts made under Corbett. Considering the political climate in Harrisburg, Barron’s goal of freezing tuition again could be in danger.
“All options are on the table, and we are thinking through our approaches,” Powers said. “Suffice it to say, there are no easy or painless solutions.”