Along with death and taxes, one of the things current Penn State students can count on are tuition hikes -- and the misconceptions that surround them. Despite constant and considerable increases every year of the 1990s, including a 10 percent increase this year alone, most Penn State students are relatively unaware of the details of the university's yearly income and spending.
Considering the trends of the previous decades, some would say it is a safe bet that the new fiscal year's plan, which the Penn State Board of Trustees will begin to discuss starting tomorrow and Friday, will include yet another tuition increase -- but why should this be occurring at a state school? And where does the money go?
When students were posed those same questions, the responses generated were unsure at best, and not entirely accurate.
"My tuition money, as far as I would imagine, goes to pay the professors' salaries and whatever would be left over would go for improvements on campus like the new construction," said David Nalbone (sophomore-division of undergraduate studies).
Andrea Michalski (senior-architectural history) had similar thoughts on where tuition money goes.
"[I think it goes to] faculty salaries, a lot of new construction, and general maintenance, because we pay for all our other materials -- we buy our own art supplies. We buy our own books," Michalski said.
Contrary to what the average student might guess, Penn State's 2003-2004 budget, totaling about $2.5 billion ($2,558,930,000), is split up in nearly innumerable directions -- not just between faculty salaries and new construction.
Although it would be interesting to see exactly where each of our tuition dollars is spent, the budget money is a melting pot of students' dollars, state appropriations, gifts and "auxiliary enterprises" revenue (for example, Housing and Food Services), making it nearly impossible to trace the path students' money takes.
"It tends to be looked at as a pool," said Tysen Kendig, Penn State spokesman.
The composition of that pool is, however, discernable.
Due to Gov. Ed Rendell's recommendation to cut state appropriations by 5 percent in a time where university costs are inarguably increasing, Penn State students will see a tuition increase of about 10 percent in 2003-2004.
"We don't want the quality of a Penn State education to slip, so we have to supplement with increased tuition dollars," Kendig said.
Historical breakdown
About half of the university's total budget goes into what is called the general funds budget, which is allocated for all expenses directly associated with a student's education. About 96 percent of this budget is made up of tuition dollars combined with state appropriations, in a ratio of about 2 to 1, respectively.
This proportion reveals the steady decrease in support given by the state since 1970-71, when the ratio was the exact opposite.
Why is this amount so low?
Penn State, though popularly deemed a "state school," is in fact classified as a "state-related" school, along with three other schools in Pennsylvania. The other three schools are Lincoln University, University of Pittsburgh and Temple University.
In the 1960s, Penn State was the only university in Pennsylvania to have this classification, which means it is only partially state funded. This status allows the university to retain a level of independence from the state, while still receiving a portion funding from it.
"Ed Rendell is a member of the board and has appointees to the Board of Trustees, which are the university's top governing bodies. So that is the extent of [state control] from an administrative standpoint," Kendig said.
In the early 1960s, originally private Lincoln University, University of Pittsburgh and Temple University enrollment numbers began to dwindle, causing the state to expand its list of state-related universities to include the three.
Because of this, Penn State began seeing a dip in the portion of its budget provided by the state, Kendig said.
Penn State is under-funded compared to its state university counterparts.
For example, Temple University, which has an enrollment of about 21,400 students, will receive $164,900,000 in state aid this year. Meanwhile, Penn State, which has a statewide enrollment of about 75,000 full-time equivalent students, will receive $306,465,000. When compared, Temple receives about $7,706 for each of its full-time equivalent students, whereas Penn State receives only $4,086 per student.
"It's an argument that Penn State has been making for several years, that flat funding is not [the best way to go]," Kendig said. "It's ultimately the Penn State students who suffer."
The university has been rather resourceful in generating other sources for the money necessary to keep the university competitive.
Athletics, dining commons and the Nittany Lion Inn, for example, are self-contained operations called "auxiliary enterprises."
Profits from these ventures contribute to projects separate from the general funds budget, such as Milton S. Hershey Medical Center.
Numerical breakdown
The university's budget not only comes from a variety of sources, but is also allocated to wide-ranging functions.
In 2003-2004, $442.7 million of the $1.2 billion general funds budget will go toward instruction and research. Institutional support will require $149.6 million. This includes safety and security at the university, such as card access systems and University Police services, alumni fund-raising including Lion Line, and support services to faculty and staff, among a large list of others.
Student services will be allocated $60.7 million, which will go to finance admissions, the university registrar and services such as resident assistant programs, the Center for Counseling and Psychological Services and Ritenour Building, which "contribute to the student's emotional and physical well-being," according to the University Budget Office's Web site.
Tuition also encompasses Office of Physical Plant's (OPP) $117.7 million of university funding. OPP is responsible for all the physical resources of the university: heating, cooling, maintaining the university's building structure, landscaping and cleanliness, said Paul Ruskin, OPP spokesman.
"Basically, if it's something that you can touch, we handle it," Ruskin said. "We manage all the new construction and are responsible for developing long range plans in conjunction with the academia to determine what the colleges will need down the road."
OPP employs 1,100 people, from janitors and plumbers to ventilation technicians and engineers, Ruskin said.
About $29.8 million of the general funds budget will go to student aid, up nearly $5 million from last year -- an important increase to offset the tuition hike at Penn State, where about 75 percent of students rely on some form of financial aid. Academic support, which includes such expenses as maintaining and improving libraries and galleries, as well as providing audio-visual products and services for classrooms, will account for $215.4 million of the budget. Advising services, computer services such as Rescom, and payroll for deans and other academic administrators also fall under this section.
Other expenses taken into account for the new year's budget include faculty salary and health benefit increases, as well as the President's Excellence Fund. The fund is set aside to reward especially deserving members of the faculty to help ensure the university retains its most valuable instructors and researchers.
Enduring with less
In truth, although many may suspect the university is making inefficient use of its financial resources, Penn State has consistently been ranked among the top 50 universities in the country the past five years. None of the other top 50 universities in the country have faced such a large discrepancy between its ranking of academic quality and financial resources, as Penn State has, according to U.S. News & World Report.
In other words, it does a lot with a little.
"I think there's a misconception that Penn State is hoarding money," Kendig said. "We just want to make sure that the Penn State education maintains the same level of quality as it has in past years, if not better."
