GSpan’s Tuition Trick Ends Budget Drama

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This year’s saga regarding Penn State’s state appropriations concluded last Friday when the Board of Trustees approved increased tuition increases that will range from 2.9% to 4.9%. This year’s increase in tuition rates is, in fact, down a whole percentage point from last year’s rise of between 3.9 and 5.9%.

The lower than expected increases come shortly after Penn State was nationally recognized for the high cost of education for in-state students. But with a 19% final reduction in state appropriations, how Penn State managed to keep this year’s tuition increase about 10% lower than it has been on average over the past 5 years is an interesting and complex story. Fair warning… this post doesn’t get into whether or not historical tuition increases were warranted. But if it took the university facing an unprecedented appropriations cut to institute policy change, we won’t fault you for wondering aloud why Graham Spanier is only now tapping the war chest.

In an email sent by Spanier to all Penn State employees a few weeks ago — after the state budget was signed by Gov. Tom Corbett — Spanier explained that the university would enact only moderate tuition increases. Despite the decrease in appropriation, Spanier explained that Penn State had been successful in the process of finding and eliminating inefficiencies through the Core Council and other initiatives.

He wrote then:

Over the past three months we have identified internal savings of nearly $30 million across the University. Other savings are being generated by the implementation of our new health care benefits program. We have implemented significant energy cost savings, cut funding for our capital improvement program, identified savings for our property and liability insurance, and cut back on funds for new programs. The elimination of our normal salary increase this summer also generates significant savings.

As the president of a large state university, Spanier’s cuts seem to have been a successful and shrewd strategy in the end; the fact that he mitigated the severity of the tuition increases will better position the university for a political fight next year to restore a portion of the appropriation despite the Republican-controlled state government.

His performance this spring could turn out to be a great bullet to have on his resume in prelude to his departure from Penn State, which could possibly come after the conclusion of the For the Future campaign at the end of the fiscal year 2014.

[It’s worthwhile to note that the university recently announced that as of this just-concluded fiscal year, the For the Future campaign had raised $1.38 billion, just edging out the total amount raised in Spanier’s first major capital campaign, Grand Destiny. The For the Future campaign has a goal of raising $2.00 billion “to ensure that the University can continue to offer an outstanding education to students from every economic background while benefiting the public through research and service,” and it seems likely that amount or more will be raised in the years to come. It would be surprising to see Spanier leave before he can claim full ownership of that accomplishment. (One of the few things that Spanier would probably be interested in would be a political appointment, such as one from President Barack Obama, as was speculated following Obama’s election a few years ago.)]

In the university’s official press release about the Board of Trustees’ decision, Spanier was quoted as saying:

This certainly has been a challenging year. We understand that even a moderate tuition increase has an impact on our students and their families. The cost-cutting measures we’re taking involve significant sacrifice on the part of the University community as a whole, but they’re being done with the goal of allowing students to continue to pursue a Penn State education.

Access and affordability… that’s what Graham Spanier is trying to show Penn State provides with this move. As university leadership has said in the past, the institution that began as the Farmer’s High School in an unnamed area outside of Bellefonte can no longer afford to be all things to all people.

But a $4 billion budget still leaves room for the university to be many things for many people, ranging from a top-notch supply chain program to an earnest advocate for hydraulic fracking. Morever, the majority of students aren’t in programs like Science, Technology, and Society or reorganized departments like the College of Agricultural Sciences, and thus won’t be significantly be affected cuts the university has made to streamline its budget.

For a full breakdown of next year’s tuition schedule, check out the official website. 

Given the actions the university took to reach this point, we’d like to know your thoughts on how President Graham Spanier handled the budget crisis over the past year. Leave your thoughts in the comments, or send us a tweet @OnwardState!

Photo By: Dave Cole
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Creator of @OnwardState. Big fan of sweaters. Now at Fusion.

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