Penn State state funding hasn't kept up with inflation

This story was produced by the State College regional bureau of Spotlight PA, an independent, nonpartisan newsroom dedicated to investigative and public-service journalism for Pennsylvania. Sign up for our regional newsletter, Talk of the Town.

STATE COLLEGE — For more than a decade, public funding for Pennsylvania’s four state-related universities has not kept pace with inflation, according to a Spotlight PA analysis. State spending per student decreased after adjusting for inflation, even with the schools educating fewer Pennsylvania residents each year.

Spotlight PA analyzed more than 15 years of state budget and enrollment data for Lincoln University, Penn State University, Temple University, and the University of Pittsburgh. The state’s annual appropriation makes up a small proportion of the annual revenue for Penn State, Temple, and Pitt compared to Lincoln or the state-run Pennsylvania State System of Higher Education (PASSHE). The newsroom conducted a similar analysis on the state-run university system.

The commonwealth ranks second to last nationally in public support for higher education per student, according to the State Higher Education Executive Officers Association.

The Pennsylvania legislature approved funding for the state-related universities in November following roughly five months of delays. State lawmakers have not increased funding to Penn State, Pitt, or Temple since fiscal year 2020. State law requires that the universities spend the appropriation only on costs directly related to the instruction of students or student-related services. The universities use the money to create tuition discounts for in-state residents, though it is difficult to track exactly how the money is spent.

Steve Orbanek, Temple University’s director of communications, told Spotlight PA in an email that the money from the state is critical for making education accessible for Pennsylvania students. Flat funding from the legislature, increased operating costs, and inflation are challenges for the university’s budget, he wrote.

“Since fiscal year 2020, inflation has eroded $30.2 million of buying power” because the state has not increased its yearly funding from $158.2 million, Orbanek wrote.

Similarly, Penn State announced in 2022 that it had saved or reallocated more than $400 million in the past decade because the lack of state funding increases had “only intensified pressures on its tuition and budget.”

Spotlight PA calculated per-student funding by dividing the annual state appropriation by the total number of in-state undergraduate students (full-time and part-time) during the fall semester of the corresponding fiscal year. The state budget data were publicly available. The individual universities and the state system provided most of the historical enrollment data. Spotlight PA then calculated what each year’s per-student appropriation would be in terms of August 2023 dollars using the U.S. Bureau of Labor Statistics’s consumer price index inflation calculator.

Only Lincoln receives the same level of per-student support from Pennsylvania lawmakers today ($22,717.28 per student) as it did in fiscal year 2007($22,841.70) when adjusted for inflation.

Funding per student for the other three universities dropped by thousands of dollars between fiscal years 2011 and 2012, when adjusted for inflation. Temple is the only school of the remaining three state-related universities to be close to fiscal year 2011 per-student funding levels, though this is due to both funding increases and fewer in-state students over time.

Penn State receives around $5,800 per student today, about $2,000 less per student than it did in fiscal year 2011 when adjusted for today’s dollars. Pitt receives around $9,500 per student today, approximately $1,500 less per student than it did in fiscal year 2011 when adjusted for inflation.

Per-student funding for PASSHE since fiscal year 2007 has outpaced inflation. However, state lawmakers have more control over the state system than they do state-related universities. The state-related designation gives those universities increased autonomy from the legislature and largely shields them from Pennsylvania’s open records law, even though they are public universities that receive taxpayer funds.

Pennsylvania’s universities educate thousands fewer residents than a decade ago

Since at least fall 2006, in-state enrollment has decreased for the state-related universities and state-run schools, according to the data. PASSHE is educating 24,168 fewer in-state students in 2023 than it did in 2006, an enrollment drop of 39%.

During budget hearings before the state Senate in March 2023, then-Pitt chancellor Patrick Gallagher said the system’s increasing percentage of out-of-state enrollees was due to a flat population of college-age Pennsylvania residents and increased demand from out-of-state students.

Penn State’s resident enrollment total has decreased by more than 12,300, or 23%, since 2006, according to the data.

A Penn State spokesperson, in an email to Spotlight PA, wrote the university’s declining in-state enrollment is due in part to more Pennsylvania residents enrolling in its online World Campus, which offers one standard tuition rate.

Penn State receives the lowest per-student support

While Penn State receives the largest appropriation in total dollars compared to its state-related counterparts ($242.1 million in fiscal year 2024), the university also educates more in-state students than Lincoln, Pitt, and Temple combined. But Penn State receives the smallest per-student appropriation, a reality that has remained consistent for Penn State since at least the fall of 2006, according to Spotlight PA’s analysis.

The comparatively small amount of aid per student is a central part of Penn State’s argument for greater taxpayer support. In September, the university’s Board of Trustees agreed to request $368.1 million in general support from the legislature for fiscal year 2025, a 52% increase over what it ultimately received for fiscal year 2024.

In a September news release, the university said the requested amount would bring its funding to levels similar to those of PASSHE. However, the legislature has greater control over PASSHE, and the system has greater transparency requirements than Penn State.

Penn State President Neeli Bendapudi has called on the legislature to work with university leaders to create a “performance-based funding model for higher education.”

In its push for more taxpayer funds, Penn State published an “accountability report” as the legislature increased some of the transparency requirements for the state-related universities.

SUPPORT THIS JOURNALISM and help us reinvigorate local news in north-central Pennsylvania at spotlightpa.org/donate/statecollege. Spotlight PA is funded by foundations and readers like you who are committed to accountability and public-service journalism that gets results.