Making Penn State More Affordable

A Discussion with the Board of Trustees May 7, 2021

Levers to Make Penn State More Affordable• Controlling the Cost of Attendance (Tuition, Fees, Room and Board)• Federal, State and Private Aid• Institutional Aid

• Scholarships and Awards• Growing Institutional Funds through Tuition• Philanthropic Support (time to degree; scholarship campaigns)• Academic Advising Support

• Frontier: Food and Housing Insecurity• Financial Literacy and Transparency

Controlling the Cost of Attendance

Data Source: U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), "Public Elementary/Secondary School Universe Survey"

Controlling the Cost of Attendance• Multiple years of frozen in-state tuition (7th in the AAU for lowest

increases in in-state tuition over the last 10 years).• 0% increases were set in 2020-21 and tuition was lowered for summer

2020 in acknowledgement of pandemic-related financial hardship.• Budget reductions and reallocations are a continuing effort (e.g. with

recent Board agreement to save $150M and split savings between innovation and affordability).

• Calculated in FY21 dollars, in-state students are now paying less tuition for their Penn State education than they were in 2011-2012.

• For in-state students, avoidance of a 2% annual tuition increase would save between $900 and $1,100 in the cost of a degree (4 years).

Tuition in FY 21 Dollars

$18,116 $18,120 $18,377 $18,664 $18,391 $18,783 $19,049 $18,673 $18,243 $17,920

$32,143 $32,009 $32,309 $32,818 $33,288 $34,365 $35,236 $35,766 $35,614 $34,984

$14,916 $14,779 $14,730 $14,807 $14,590 $14,691 $14,717 $14,426 $14,093 $13,844

$22,458 $22,246 $22,156 $22,259 $22,196 $22,535 $23,098 $23,297 $23,195 $22,785

$12,000 $14,000 $16,000 $18,000 $20,000 $22,000 $24,000 $26,000 $28,000 $30,000 $32,000 $34,000 $36,000 $38,000 $40,000 $42,000 $44,000 $46,000 $48,000 $50,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

UP LD - Resident UP LD - Non-Resident CWC LD - Resident CWC LD - Non-Resident

24.71%

27.45%

8.22%

10.99%

4.94%

9.43%

0.00%2.50%5.00%7.50%

10.00%12.50%15.00%17.50%20.00%22.50%25.00%27.50%30.00%

B1G Average PSU CPI

Resident - Percentage Change in Tuition

2008-09 through 2013-14 2014-15 through 2020-21

26.33%

20.26%

8.22%

22.91%

16.51%

9.43%

0.00%2.50%5.00%7.50%

10.00%12.50%15.00%17.50%20.00%22.50%25.00%27.50%30.00%

B1G Average PSU CPI

Non-Resident - Percentage Change in Tuition

2008-09 through 2013-14 2014-15 through 2020-21

Historical Context: PSU Tuition Increases* Compared to the Big Ten

*UP undergraduate lower division rates used as basis for comparison

Federal, State and Private Aid

Data Source: U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), "Public Elementary/Secondary School Universe Survey"

Financial Aid, Scholarships and Grants• Federal student aid - $617M (49% of the total) with 49K recipients.

• State student aid - $43.7M (3% of the total funds) with 14K recipients.

• Private/external funds AND third-party payments totaled $285.7M (23% of the total funds) with 22K recipients.

• Penn State (AAU and APLU) actively lobbying for increases in Pell awards.

• Penn State actively lobbying for Nellie Bly Scholarship program to be applied to state-related universities and greater funding for PHEAA.

Source: 2019-20 Office of Student Aid Annual Report Data

Emergency Funds for COVID-19 ReliefFederal: Higher Education Emergency Relief Funds (HEERF I): The Coronavirus Aid, Relief, and Economic Security Act or, CARES Funding

$27,733,503 dollars awarded28,129 students

These funds also include federal CARES funding provided to specific campus locations due to the demographic makeup of those specific populations.

Institutional Emergency Funding: $1,023,379 dollars awarded1,378 students

NOTE: HEERF II (CRRSAA Funding) is in the process of being awarded to students.

Institutional Aid

Data Source: U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), "Public Elementary/Secondary School Universe Survey"

Financial Aid, Scholarships and Grants• Institutional aid totaled

$322M (25% of the total funds) with 42K recipients.– Provost Awards

– Discover Awards

– Philanthropy

Source: 2019-20 Office of Student Aid Annual Report Data

12

$190,000,000

$210,000,000

$230,000,000

$250,000,000

$270,000,000

$290,000,000

$310,000,000

$330,000,000

34,00035,00036,00037,00038,00039,00040,00041,00042,00043,00044,000

Dollar Value Headcount

10 Year Institutional Funds to Students TrendH

eadc

ount

Dollar

Value

*This was the year that the University transitioned to the LionPATH student system.

Provost Award• Award amounts

– 2013 to 2019 - $4,000 for four years– 2020 to current - $5,000 for first two years; $7,000 for final two years

• Students Awarded:– 921 at Commonwealth Campuses and 470 at University Park in 2020– 14,618 students awarded 2013-2020

• Goals:– Attract high-achieving students with financial need– Increase socioeconomic and under-represented diversity– Increase yield of admitted students– Commonwealth Campuses place priority on Pennsylvania residents

Discover Grants2020-21 Academic Year• Commonwealth Campus

(Transfer and First-Year): 785

Alternative to tuition freeze by growing institutional funds• Consider 2% tuition increases annually – increase in total cost of

four-year degree for in-state students is $900 to $1,100.

• Apply 1% of total increase in income to need-based students:

– 6,000 students net $2,000 – so total cost of a four-year degree decreases by $1,000.

• Grows institutional funds $12M+ a year.

• Used by other institutions but not yet at Penn State.

Time to Degree Time to degree is a major factor in increased student debt:

• 4.3 years to completion adds $5,600 in debt compared to 4 years or less to graduation.

• 6-year graduation rate adds approximately $12,000 to student debt.

Non-traditional Philanthropy: Time to Degree Open Doors Programs• RaiseMe• Pathway to Success Summer Start (PaSSS)• STEP• Complete Penn State• Smart Track to Success (World Campus)• Financial Literacy and Awareness

Through April 1, 2021, there are 4,025 unduplicated students who received an award through Open Doors programs since their inception--for a total of $11,416,452.

Scholarship Campaigns• Open Doors Matching Scholarships

– Raised more than $31M to secure more than $61M. The average award in $2,596.

• Open Door Theme: $525.1M raised of $740M philanthropic goal• Educational Equity Matching Scholarships

– 165 committed donor gifts, totaling $11.1M, with a total impact of $24.6M.

Board of Trustees

• Emergency Fund – Activated Oct. 2018 – $602K Book value– Generally 100% spend – FY 20 - $23,093 distributed to

13 students

Philanthropic Support of Scholarships

$71,972,397

$60,683,638

$74,829,423

$84,268,841

$47,878,889

$58,367,939

$123,271,540

$99,344,617$100,788,776

$107,644,553

$74,217,976

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21*

Commitments

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21*

For the Future No Campaign A Greater Penn State

Philanthropic Funded Student Awards

15,436 17,222 18,047 18,721

20,403 21,387 21,468 22,716 23,562 24,360

21,437

-

5,000

10,000

15,000

20,000

25,000

30,000

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21*Awards

Academic Advising to Enable Timely Degree Completion

• Advising relationship plays a critical role in the college experience and student success.

• 76% of all recorded advising appointments in 2020 were held by 244 professional advising staff memberso 126,788 one-on-one advising meetingso 250,000+ advising notes added to

Starfish

Connecting Classroom and Advising with Starfish Progress Reporting

Student shows signs of academic difficulty

Instructor alerts Adviser of the problem in Starfish Progress Report

Adviser reaches out to the student

Student responds to Instructor/Adviser outreach

No one raises concern

No one reaches out in support

Student left to address challenges alone

9% higher fall-to-spring retention rate University-wide when student concerns were addressed

5% higher term GPA and8% higher pass ratewhen student concerns were addressed

Academic Advising: Using Technology to Improve Effectiveness• The required rapid shift to virtual advising has led to expanded usage

of Starfish for proactive scheduling, meeting, and identifying at risk students.

• Students can self identify by “raising their hand” to indicate they need an adviser to follow-up; 1,200+ students unable to return to campus this fall have used this function to find alternatives (i.e. World Campus, transferring to campus closer to home).

• Students now have flexible options to meet in person or virtually with advisers scheduling through Starfish.

Frontier – Food and Housing Insecurity

Data Source: U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), "Public Elementary/Secondary School Universe Survey"

Food Insecurity is an Issue Across Penn State

•35% of students reported food insecurity•Food insecurity varied widely by campus location•Over 40% of students at Abington and Altoona reported food insecurity•Over 30% of University Park respondents reported food insecurity

Source: CORE Prevention Center, College of Health and Human Development

Recommendations to Address Food and Housing Insecurity • Infrastructure to focus on identifying and supporting

students in need. • Develop programs for food insecurity prevention and

response.• Establish a permanent Student Emergency Fund. • Provide funding to address housing insecurity,

including emergency needs.• Advocacy for policies on local, state and federal levels.

Food insecurity prevention and response programs • All Penn State residential campuses hosted Swipe Out Hunger from

April 19-23, which allowed students to donate dining dollars to students in need.

• Other recommendations: Enhanced Lion Pantry management and offerings; bulk purchasing program; develop a sustainable funding model; and a food notification app.

Student Emergency Fund

• Establish a permanent Student Emergency Fund through major gift and annual giving efforts.

• Centralize the process for all Colleges and Campuses.

New LiveOn Student Success Grant Partnership between Housing & Food Services and Finance & Business.• Pilot program seeks to close the annual funding gap for students seeking

residential experience with qualified need who otherwise would not attend Penn State.

• Grant provides need-based student aid toward balance of Room & Board not covered after all federal, state, local and University grants, scholarships or awards are applied.

• Grant applied directly to student bill, specifically Room and Board charges.• Initial cohort up to four consecutive academic years through 2025.

LiveOn Student Success Grants @ CWCs$1.9 Million annuallyCommonwealth Campuses• Abington • Beaver• Behrend• Berks• Brandywine• Greater Allegheny• Hazleton• Mont Alto$500,000 annually• University Park

• Offers made to 2,200 students.

• Residential students will save approx. 25% per year on room and board; residing four years on campus totals one year of free room and board.

Additional Housing Support

• Emergency vouchers for room and board

• Assistance with affordable options for break periods

Financial Literacy and Transparency

Data Source: U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), "Public Elementary/Secondary School Universe Survey"

Sokolov-Miller Family Financial and Life Skills Center• Class presentations: To date, 924 class sessions reaching approx. 23,100

entering students to Penn State.• One-on-one personal financial meeting with students: Since July 2017,

Center has counseled 1,146 students with their financial literacy needs including budgeting, credit card and student loan debt management.

• Center Website: Since 2015, 55,608 visitors reviewing 180,829 pages.• Self-Study Modules: 28 different self-study modules open to public on free

website have had 25,467 visits from around the world.• Mentoring Program connects students with PSU Alumni. To date, 195

mentors and mentees have joined the program.

Financial Transparency for Career Planning

New Tools to Support Career Planning

Key Points• Calculated in FY21 dollars, in-state students are now paying less tuition

for their Penn State education than they were in 2011-2012.• Small savings across the board by freezing tuition have significantly less

impact than targeted funds for those in greater need that are at risk of not graduating.

• Philanthropy is currently the only bright spot in recruiting students and directing funds to students in need – through time to degree programs, financial literacy, and scholarship campaigns.

• Other universities have utilized tuition increases to support growing investment in scholarships.

• Food and Housing Insecurity is a growing challenge.• Interest in Financial Literacy and Transparency programs is also growing.

38

$32,000

$34,000

$36,000

$38,000

$40,000

$42,000

$44,000

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20In-state students Out-of-state students All students

Out-of-State students

All students

In-State students

Changes in Penn State Average Loan Debt at Graduation

In-state average = $37,942

Out-of-state average = $44,055

Source: U.S. Department of Education – 3-year Student Loan Default Rates

Student Loan Default Rates9.2%

9.9%9.6% 9.2%

8.3%

7.3% 7.5%7.1%

6.8% 7.1%

4.9%5.2%

5.1% 4.9% 5.0%

2.8% 2.9% 2.9% 2.8%3.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2013-3 yr 2014-3 yr 2015-3 yr 2016-3 yr 2017-3 yr

All PA Public 4-yr Penn State Big 10

Penn State: Average Baccalaureate Loan Debt by Income Band 2019-2020:

Income Band Average Loan Debt$0-$50K $35,771$51K-$75K $38,051$75K-$110K $42,677>$110K $41,255No FAFSA $49,046

• For 2019-2020• 55% of all UG students enrolled in 2019-2020 had

at least one student loan (for undergraduate career).

• 69% of all UG received some form of student aid.• Lifestyle borrowing and low interest rates are

causing increased borrowing despite decreases in cost of attendance.

• Cohort 2012• Graduating in 4 years or less, average loan debt =

$35,743• Graduating in 4 to 6 years, average loan debt =

$42,713• Graduating in 6+ years, average loan debt =

$50,689

Source: Office of Student Aid

Who is borrowing?

40

41

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

22000

24000

26000

28000

2010-11 2015-16 2019-20

Undergraduate Dependent FAFSA Filers by Income Range

42

$190,000,000

$210,000,000

$230,000,000

$250,000,000

$270,000,000

$290,000,000

$310,000,000

$330,000,000

34,000

35,000

36,000

37,000

38,000

39,000

40,000

41,000

42,000

43,000

44,000

Headcount Dollar Value

10 Year Institutional Funds to Students TrendH

eadc

oun

t

Dollar

Value

*This was the year that the University transitioned to the LionPATH student system.

$28,705 $28,715 $29,209 $29,808 $29,794 $30,515 $31,067 $30,735 $30,338 $30,202

$42,732 $42,604 $43,141 $43,963 $44,691 $46,098 $47,255 $47,828 $47,710 $47,266

$12,000 $14,000 $16,000 $18,000 $20,000 $22,000 $24,000 $26,000 $28,000 $30,000 $32,000 $34,000 $36,000 $38,000 $40,000 $42,000 $44,000 $46,000 $48,000 $50,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

Penn State - University Park Cost of Attendance in FY 21 Dollars

UP LD - Resident UP LD - Non-Resident

$29,677 $29,489 $30,138 $31,229 $31,332 $31,815 $31,922 $31,395 $31,525 $30,928

$40,600 $41,400 $41,224 $42,592 $42,927 $43,802 $44,212 $44,912 $45,806 $44,956

$12,000 $14,000 $16,000 $18,000 $20,000 $22,000 $24,000 $26,000 $28,000 $30,000 $32,000 $34,000 $36,000 $38,000 $40,000 $42,000 $44,000 $46,000 $48,000 $50,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

University of Pittsburgh Cost of Attendance in FY 21 Dollars

PITT LD - Resident PITT LD - Non-Resident

$18,729 $18,730 $18,947 $19,425 $19,593 $20,033 $20,282 $19,881 $20,073 $19,678

$29,652 $30,641 $30,033 $30,788 $31,188 $32,020 $32,572 $33,398 $34,353 $33,706

$12,000 $14,000 $16,000 $18,000 $20,000 $22,000 $24,000 $26,000 $28,000 $30,000 $32,000 $34,000 $36,000 $38,000 $40,000 $42,000 $44,000 $46,000 $48,000 $50,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

University of Pittsburgh Tuition and Fees in FY 21 Dollars

PITT LD - Resident PITT LD - Non-Resident

$18,557 $18,565 $18,827 $19,130 $18,863 $19,260 $19,597 $19,210 $18,782 $18,450

$32,585 $32,454 $32,759 $33,284 $33,760 $34,843 $35,785 $36,303 $36,153 $35,514

$12,000 $14,000 $16,000 $18,000 $20,000 $22,000 $24,000 $26,000 $28,000 $30,000 $32,000 $34,000 $36,000 $38,000 $40,000 $42,000 $44,000 $46,000 $48,000 $50,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

Penn State - University Park Tuition and Fees in FY 21 Dollars

UP LD - Resident UP LD - Non-Resident

18,557 18,565 18,827 19,130 18,863 19,260 19,597 19,210 18,782 $18,450

32,585 32,454 32,759 33,284 33,760

34,843 35,785

36,303 36,153 $35,514

18,729 18,730 18,947 19,425 19,593 20,033 20,282 19,881 20,073 $19,678

29,652 30,641

30,033 30,788 31,188

32,020 32,572

33,398 34,353

$33,706

$12,000

$14,000

$16,000

$18,000

$20,000

$22,000

$24,000

$26,000

$28,000

$30,000

$32,000

$34,000

$36,000

$38,000

$40,000

$42,000

$44,000

$46,000

$48,000

$50,000

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

Tuition and Fees in FY 21 Dollars

UP LD - Resident UP LD - Non-Resident PITT LD - Resident PITT LD - Non-Resident