A report presented to the Penn State Board of Trustees Friday shows that financial aid packages are not keeping up with students' rising financial needs.
Though 80 percent of undergraduates received some form of financial aid in during the 2004-05 year -- compared to 68 percent 10 years ago -- the purchasing power of federal grants has not kept up with increasing tuition, according to the report.
The maximum state grant, which was not increased from 2001 to 2004, is $3,500 per year this year. The maximum federal Pell grant, which has not increased since 2002, is $4,050 this year.
Assistant Vice President for Student Aid Anna Griswold said the university must do more to reduce the financial aid gap.
"The convergence of rapidly increasing costs and relatively flat funding in the federal and state grant programs is creating an increase in unmet need for our students," Griswold said.
Pennsylvania Higher Education Assistance Agency (PHEAA) spokesman Mike Reiber said PHEAA can't increase the maximum grant amount without increased state funding.
"It's the state legislature that determines the funding level each year," Reiber said. "Much of our ability to use the money most effectively is determined by whether those legislative allocations are increased or not."
Reiber said it is difficult for PHEAA to help students deal with rising college prices without increased support from the legislature.
The median family income of University Park students applying for aid is $70,524, compared to a national average of $53,692 and a state average of $53,680. Undergraduate in-state tuition is $11,508, up from $5,308 10 years ago.
Since the 2001-02 year, the number of students receiving financial aid whose families make less than $40,000 has decreased 2 percent, and the number of students receiving aid whose families earn from $40,000 to $85,000 decreased 6 percent, but the number of students receiving aid whose families make $85,001 or more increased 18 percent.
Trustee Steve Garban said the university may have to realize that it is no longer serving lower- and middle-income students.
"The student body is becoming a higher income body," Garban said. "It does leave me with a depressed feeling."
Penn State spokeswoman Jill Shockey said she does not believe that the decreasing numbers of lower- and middle-income students conflicts with the university's mission as a public institution.
"I think the reality of the fact is that college education is a competitive market," she said. "It's trending towards a lower-cost education at community colleges -- that's becoming an increasingly competitive arena of higher education."
Alex Kring (sophomore-computer science) said the university should take action to reduce the gap between costs and financial aid.
"It's a mismatch between the type of school we are and the pricing we're giving out to students," Kring said. "We tend to educate the middle class, but the numbers don't reflect that."
