UNIVERSITY PARK, Pa. — Penn State President Eric J. Barron emphasized the critical importance of state funding for Penn State students and the commonwealth itself during a March 3 hearing of the Pennsylvania Senate Appropriations Committee in Harrisburg.
Barron, who was joined at the hearing by the leaders of the commonwealth’s other state-related institutions — Temple and Lincoln universities and the University of Pittsburgh — said Penn State’s appropriation is vital to the thousands of Pennsylvania students and their families who rely on the cost savings provided by the University’s in-state tuition rate, which is directly funded by state support.
In his discussion with senators, Barron underscored that Penn State more than doubles the state’s investment on a per-student basis, passing savings on to Pennsylvania students through an in-state tuition rate that is substantially less than the actual cost of instruction. University-wide, the average Pennsylvania resident undergraduate pays approximately $13,000 less per year for tuition than a nonresident student because of the commonwealth’s investment in Penn State.
“Every single dollar that goes into our Education and General budget is there to make sure we keep costs low for in-state students,” said Barron. “It is our commitment to make sure we turn the investment from the state into opportunities for access and affordability.”
Barron noted that the value of direct state funding lies in the fact that Penn State is able to leverage the state’s investment to yield tuition savings for Pennsylvania residents that far exceed the per-student appropriation, adding that affordable access to higher education makes Pennsylvania stronger.
Penn State’s impact on Pennsylvania’s workforce and economy is immense — and felt in every corner of the state. With nearly 90,000 students and 24 campuses, and with more than half of Penn State’s 700,000 living alumni residing in Pennsylvania, Penn State educates and trains the state’s workforce like no other entity in the commonwealth. More than 20,000 new Penn State graduates enter the workforce annually, and most of these students choose to live and work in Pennsylvania. Penn State alumni are important contributors to the state’s economy, earning family-sustaining jobs in high-demand career fields, providing an exceptional return on the state’s investment.
As an economic engine, Penn State contributes more than $11.6 billion to the state’s economy — or roughly $31.8 million per day — and supports, both directly and indirectly, 105,000 jobs, according to a 2019 study. As further evidence of Penn State’s positive economic contributions, for every $1 in state funding that Penn State receives, the University returns $1.24 in tax payments to the commonwealth.
Barron added that state funding is essential to Penn State’s ability to innovate, to invest in the quality of its academic programs so that graduates are prepared for the latest career trends, and to recruit and retain the best faculty and staff. These factors, along with the in-state tuition discount, ultimately impact Penn State’s ability to remain competitive for Pennsylvania’s top students and provide a strong incentive for them to remain in Pennsylvania for college and beyond, Barron said.
Governor’s proposed budget would increase Penn State’s funding
For the 2022-23 fiscal year, Pennsylvania Gov. Tom Wolf has proposed a 5% funding increase for Penn State and the commonwealth’s other state-related universities. The governor’s proposed increase aligns closely with the 2022-23 appropriation request that Penn State submitted to the state last September.
The funding increase, if agreed upon by the General Assembly, would be Penn State’s first since a 2% increase for the 2019-20 academic year.
In addition to offsetting the cost of resident tuition, state appropriations fund Penn State Agricultural Research and Extension operations that support agricultural education, serve rural communities, and help to address the challenges facing Pennsylvania’s agriculture industry in all 67 counties; provide important funding for Pennsylvania College of Technology in Williamsport, a special-mission Penn State affiliate with a focus on applied technology education; and enhance Pennsylvanians’ access to high-quality health care through the Penn State Health enterprise and College of Medicine.
A full breakout of the governor’s proposed funding levels for Penn State is available here.
Economic development extension
The governor’s proposed budget includes the University’s request for $2.35 million in new funding for Invent Penn State, which would help to strengthen and grow the Invent Penn State LaunchBox and Innovation Hub Network across Pennsylvania, expand established entrepreneurship training programs and startup pitch competitions with additional staffing and support services, and increase access to the Pennsylvania Technical Assistance Program to support more businesses.
As part of its 21st century land-grant mission, Barron told lawmakers that Penn State has placed additional emphasis on its role in job creation, economic development and student career success. He highlighted Invent Penn State as the centerpiece of the University’s efforts to cultivate a culture of entrepreneurship and innovation by providing the resources and know-how to de-risk and remove barriers for anyone in Pennsylvania who wants to launch a business.
“Invent Penn State is designed to help both community members and students, faculty and staff build their companies in the state of Pennsylvania,” said Barron. “Rather than go to Silicon Valley, you can come to Penn State and have the quality of living and the resources to build a business and a life in Pennsylvania. We see this as part of our responsibility to focus on economic development in the state of Pennsylvania and help our young people to stay here in the commonwealth.”
Barron said Penn State and its individual and corporate partners have invested significant resources to develop and grow Invent Penn State’s innovation hub network to 21 locations statewide. Modeled after Penn State agricultural extension, 96% of Pennsylvanians now living within 30 miles of one of the hubs. Since launching in 2015, Invent Penn State has assisted nearly 5,000 Pennsylvania entrepreneurs; engaged with more than 13,000 Penn State students, faculty and staff; helped to launch 218 new Pennsylvania companies; completed 201 product development projects; and created more than 300 new jobs and nearly 500 internships.
Importantly, Invent Penn State is leveraging Penn State’s $1 billion research enterprise to help students, faculty and staff fast-track the transfer of their discoveries and new ideas into products and services that are benefiting Pennsylvania and its economy.
Penn State’s commitment to affordability
Barron said that Penn State has worked hard to be good stewards of state funding to keep costs as low as possible for students. The University has controlled costs better than many of its peers, having implemented more than $140 million in cost-saving measures over the last two fiscal years alone.
Because of Penn State’s fiscal responsibility, Pennsylvania resident seniors graduating this spring experienced only one tuition increase during their time at Penn State — a 2.5% rise this academic year — after three consecutive years of tuition freezes from 2018 to 2020. Barron noted that, when accounting for inflation, students graduating in May are not only paying less in real dollars today than they did four years ago, but they are also paying less in real dollars than they would have in 2011.
Penn State has been able to control tuition costs despite receiving an appropriation of approximately $5,400 per Pennsylvania undergraduate — the lowest per-student funding of any public higher education institution in Pennsylvania and well below the national average of more than $7,600 per student. Barron said that while few public flagship universities can match Penn State’s record on cost control, he emphasized that continued funding support from the commonwealth is needed to minimize future tuition increases.
“We have been operating on sub-inflation state appropriations for more than a decade, and we are also operating on sub-inflation tuition for Pennsylvania residents,” Barron said. “That is very difficult to achieve year-in, year-out. That means we have to find new ways to cut costs to keep tuition at the best level we can offer. This is a challenge and it is getting harder and harder.”
Over the last decade, Penn State has intensified its efforts related to access and affordability, with a focus on reducing the total cost of a degree, decreasing the rate of student borrowing, promoting the success of need-based students, and helping students facing financial hardships to complete their studies.
To help with student success, the University has launched a variety of programs under the Achieve Penn State initiative to help remove obstacles students may encounter along their path to a degree, so that they can succeed academically, graduate in four years, and reduce their postgraduate debt — while also providing them with financial literacy and life skills.
“We want students to have a fast start and remove roadblocks to on-time graduation to make sure they complete their degree and do it within four years,” said Barron. “The biggest contributor to student debt is if a student goes five years or six years and they’ve run out of resources, so they end up borrowing more money to get their degree. And the biggest tragedy would be if they didn’t get their degree at all.”
Penn State has made student scholarship support a priority in its “A Greater Penn State” fundraising campaign, and programs like Open Doors Scholarships and Provost’s Awards are helping high-achieving students to overcome financial obstacles to earn their degree. Barron said Penn State has committed additional resources and offers a range of services to assist students experiencing food and housing insecurity, including the new LiveOn Student Success Grant Program, which provides students with up to $12,000 over four years to help lower the cost of on-campus room and board.
“We just had a Renaissance Scholarship program in which the focus was food security, and my wife and I believe in this so strongly that we provided more than $500,000 of our own money to send a message to our donor community that food security is incredibly important to Penn State,” Barron said.
A mutually beneficial partnership
“Since 1855, Penn State and the commonwealth have partnered to benefit families and communities across Pennsylvania,” Barron wrote in the University’s state appropriation request. “Penn State’s educational programs, research and outreach will continue to make measurable and meaningful differences in the economic development of our communities, from local to global levels. Strengthened by our partnership with the commonwealth, Penn State can drive job creation, economic development and student career success, all while ensuring that a Penn State education is within reach financially for Pennsylvania students with the ability and desire to attend. Our partnership has been mutually beneficial, and Pennsylvania would not be the same without it.
“I appreciate the continued support of the governor and the General Assembly, and we look forward to ongoing conversations about the enormous potential of increased investment in Penn State as a vehicle to advance the economic development agenda for Pennsylvania.”
Barron will next address the House Appropriations Committee on March 8 in Harrisburg, and Penn State students, faculty, staff, alumni and friends are encouraged to voice their support for Penn State and the University’s state funding at Advocate Penn State Capital Day on March 30. To learn more about how to help support Penn State’s legislative priorities, visit advocate.psu.edu. Penn State’s appropriation will be finalized later this summer, as lawmakers must agree upon and present a 2022-23 state budget for the governor’s signature by the end of the fiscal year on June 30.