The University will probably receive more money from the state this year, but some of the extra change may come at the expense of out-of-state students' pockets.

Although the University will receive money from the state's Tuition Challenge Grant if it limits in-state tuition increases, that stipulation may force the University to increase out-of-state tuition more as compensation.

The conditions of the grant stipulate that the University limit in-state tuition increases to 4.5 percent. Last year under this agreement, in-state tuition rose 4.5 percent and out-of-state tuition climbed 5.5 percent.

University President Joab Thomas said he could not speculate how the grant would affect out-of-state tuition this year because the University Board of Trustees sets the tuition rate.

"There's not a substantial difference between in-state and out-of-state (increases)," Thomas said.

Undergraduate in-state tuition is $2,376 per semester this year, an increase of $102 from last year, and out-of-state tuition is $5,050 per semester, an increase of $263.

For students, the slightest increase could cause problems.

"I know my dad is having a lot of problems with his job right now," said John Egger, a student from Maryland "He's putting a lot of pressure on me to get scholarships."

Egger (freshman-mechanical engineering) said although he understands the University wants to remain affordable to in-state students, the thought of a higher tuition increase for out-of-state students irritates him.

A portion of the more than $268 million Gov. Robert P. Casey has proposed to give the University for 1994-95 would be drawn from the grant -- about $9.3 million. The University received $259 million from the state last year, $9.9 million of which came from the grant.

"I'm not particularly supportive of the state establishing the tuition rate," Thomas said, but added that University officials support keeping tuition as low as possible.

The grant would divide almost $32 million among the state's public universities based on the number of in-state students.

The grant works to the University's advantage because Penn State has more in-state students than most schools, Thomas said. Out-of-state students make up only 15 percent of the student body, according to Fall Semester 1993 enrollment figures.

John Romano, vice provost for enrollment management and administration, said this past year's out-of-state admissions decreased 5 percent, or 66 students, from the previous year.

Financial strains could prohibit some out-of-state students from returning to the University. But Anna Griswold, assistant vice provost of financial aid, said higher tuition could raise their eligibility for scholarships. Griswold said she saw no increase in aid to out-of-state students last year.

"There is no specific money earmarked for out-of-state students," she said.