FUTURE TUITION PLANNING


The following recommendations for future tuition planning at Penn State are based on the report of the University's Tuition Task Force. The Task Force report was presented to the Board of Trustees on May 10, 2002. The Board is being asked to approve in principle the general recommendations presented in the Task Force report and repeated below, as well as to approve certain specific recommendations for tuition adjustments for 2003-04 and 2004-05. The general recommendations are as follows:

GENERAL RECOMMENDATIONS

  1. The tuition model adopted by Penn State should be a combination of increased tuition differentials by campus location and by student level, and incremental increases as needed to generate the funds necessary to achieve the University's strategic goals and to meet the associated budget requirements.

  2. Higher tuition should be phased in beginning with incoming freshmen, with lower increases for current continuing students.    

  3. With respect to student aid, the University's continuing goal should be to insure that any student from the Commonwealth will be able to attend Penn State through a combination of federal, state, institutional, and private philanthropic support.
   

SPECIFIC RECOMMENDATIONS    

  1. Undergraduate Tuition Differentials by Campus Location -

    a. It is recommended that the University adopt three basic undergraduate tuition rates among the various Penn State campuses: (1) a University Park rate; (2) a somewhat lower rate for Erie and Harrisburg; and, (3) a lower rate for other campus locations.  

    b. Care should be taken to insure that information that is provided to the public with respect to differential campus tuition levels reflects differing campus cost structures, and does not lead to erroneous impressions of differences in educational quality.  

  2. Changes in Tuition Differentials by Student Level -  
 
    a. The plan developed by the former University Planning Council (UPC) Working Group on Tuition recommended a differential between lower division and upper division tuition based on the higher cost of upper division education. A differential of $300, or half of the original planned amount, was implemented over a three-year period beginning in 1997-98. The current differential has grown to approximately $360 as a result of compounding increases over the last several years.  

    b. It is recommended that the balance of the earlier plan be implemented, and that the differential tuition between lower division and upper division undergraduate students be set initially at approximately $720 per year.

    c. The UPC plan recommended that graduate tuition be set somewhat higher than upper division undergraduate tuition. The current differential is $472, which is consistent with the level originally envisioned in the UPC plan. This differential between upper division undergraduates and graduate students should be maintained.

  3.  Changes in Tuition Differentials by Residency -

    a. As resident tuition increases, especially through higher increases for incoming freshmen, it may not be possible or desirable from a market standpoint to maintain the current differential of 2.1 to 1 between non-resident and resident tuition at University Park and 1.5 to 1 for the Commonwealth College and other campus locations.  

    b. It is recommended that future tuition rates for non-resident students be reflective of state appropriation levels, student demand, the actual cost of instruction, and other cost factors, rather than simply a ratio of the rate for non-resident students to that for resident students. As a result, the current differentials between resident and non-resident tuition may change over time.  

  4. Changes in Laboratory and Clinical Surcharges -
   
    a. It is recommended that the laboratory and clinical surcharges be folded into the basic upper division tuition rate, thereby creating a two-tiered upper division tuition rate schedule.

    b. Exceptions would include higher differential tuition for a few selected programs, such as Nursing, IST, and business administration programs.

  5. Changes in Mandatory Fees -

    a. Penn State should continue its philosophy of limiting mandatory fees.

    b. The student activities fee and the information resources and technology fee should continue as the only two fees assessed to all students.

  6. Student Aid -

    a. Additional funds should be budgeted for need-based institutional student aid for the next several years in order to provide accessibility.

    b. The University's Office of Development should develop plans to leverage institutional student aid funds with additional private donations for student grant and scholarship support.

    c. The University's Office of Student Aid should continue its efforts to help Penn State students obtain the maximum available federal and state student aid funding.

    d. The University should make students and parents more aware of the benefits of federal tuition tax credit programs.


RECOMMENDED TUITION CHANGES FOR 2003-04 AND 2004-05        

It is recommended that beginning in 2003-04, tuition differentials be implemented by student level and by location such that incoming freshmen would be charged higher increases in 2003-04 and again as sophomores in 2004-05. All incoming freshmen beginning in 2004-05 also would pay the higher rates. Increases for University Park students will be higher than for those at other campus locations. The existing differential tuition for upper division and graduate students at all campus locations would be increased by $360 over two years, and the existing differential tuition for the Master of Business Administration (MBA) students at University Park will be increased by an additional $2,360 over two years. In order to enable prospective students and their parents to consider the cost of tuition in their enrollment decisions, the following specific recommendations are made for the 2003-04 and 2004-05 academic years:

  1. Recommended differential increases for incoming freshmen:    

    a. University Park  

    - Beginning Fall Semester, 2003, incoming freshmen will be charged a basic tuition increase over the 2002-03 tuition level (to be determined by the Board of Trustees in July, 2003) plus an additional increase of $250 per semester.

      - Beginning Fall Semester, 2004, students who entered as freshmen in 2003-04 will be charged a basic tuition increase over the 2003-04 level (to be determined by the Board of Trustees in July, 2004) plus an additional increase of $250 per semester. All incoming freshmen beginning in 2004-05 also will be charged these higher rates.

    b. Other Campus Locations  

      - Beginning in Fall Semester, 2003, incoming freshmen will be charged a basic tuition increase over the 2002-03 tuition level (to be determined by the Board of Trustees in July, 2003) plus an additional increase of $50 per semester.

      - Beginning in Fall Semester, 2004, students who entered as freshmen in 2003-04 will be charged a basic tuition increase over the 2003-04 level (to be determined by the Board of Trustees in July, 2004) plus an additional increase of $50 per semester. All incoming freshmen beginning in 2004-05 also will be charged these higher rates.

  2. Recommended differential increases for continuing students:  

    a. All Campus Locations  

      - Beginning in Fall Semester, 2003, continuing students will be charged a basic tuition increase over the 2002-03 tuition level (to be determined by the Board of Trustees in July, 2003). Upper division and graduate students will be charged an additional increase of $90 per semester.

      - Beginning in Fall Semester, 2004, continuing students will be charged a basic tuition increase over the 2003-04 level (to be determined by the Board of Trustees in July, 2004). Upper division and graduate students will be charged an additional increase of $90 per semester.

  3. Recommended differential increases for Master of Business Administration (MBA) students at University Park:    

    a. Incoming MBA Students  

      - Beginning in Fall Semester, 2003, students entering the MBA program will be charged a basic tuition increase over the 2002-03 tuition level (to be determined by the Board of Trustees in July, 2003) plus an additional increase of $590 per semester.

      - Beginning in Fall Semester, 2004, students who entered the MBA in 2003-04 will be charged a basic tuition increase over the 2003-04 level (to be determined by the Board of Trustees in July, 2004) plus an additional increase of $590 per semester. All incoming MBA students beginning in 2004-05 also will be charged these higher rates.

    b. Continuing MBA Students  

      - Beginning in Fall Semester, 2003, continuing students will be charged a basic tuition increase over the 2002-03 tuition level (to be determined by the Board of Trustees in July, 2003) plus an additional increase of $90 per semester.

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