In-state tuition discounts could be nixed for students at four state-funded universities

Pennsylvania could be on a path to becoming the most unaffordable state in the nation for students to pursue a college education.

It’s not a direction that Gov. Tom Wolf or state lawmakers say they want to head, but it’s where their collective failure to agree on a revenue plan to fully fund the enacted $32 billion budget is taking us.

Without any revenue from the state to fund Penn State, Pitt, Temple and Lincoln universities, officials from three of the four universities say they will be forced to end the tuition discount they offer to Pennsylvania students. At Penn State, for example, that tuition reduction saves students about $10,500, university officials say.

The fourth, Lincoln, which depends on the state support to cover a quarter of its operating budget, chooses not to think about what action it might have to take.

Taking away the discount could add thousands of dollars more to the cost of a college degree in a state where by nearly all measures, Pennsylvania already ranks among the top five states for having high tuition levels and student debt.

The shifting of the burden of funding higher education from the state to students has been occurring over the last several decades in many states, but some higher education experts say they have seen nothing to the extent of completely withdrawing funding at the level that could happen here with the four so-called state-related universities.

“The funding crisis in Pennsylvania is starting to attract national headlines and the longer this goes on, the more negative repercussions it will have not only for the campuses but the state as a whole,” said Thomas Harnisch, director of state relations and policy analysis at the American Association of State Colleges and Universities.

Michael Poliakoff, president of the American Council of Trustees and Alumni, said removing the discount would cut the legs out from under the state’s economic future. It also would betray students and families who paid taxes for years only to have the rug pulled out from under them when they are seeking affordable college opportunities.

Workforce studies indicate more than 60 percent of jobs will require some kind of post-secondary education by 2020.

“Every piece of evidence points toward the fact that higher education is a public good,” Poliakoff said. “An educated workforce is the engine of prosperity.”

A $30 million investment in University of Pennsylvania veterinary school also is being held up because of the ongoing state budget dispute. It receives funding because it is the state’s only vet school and in return, Penn Vet supports the state’s vast animal agricultural industry and offers Pennsylvania students a tuition discount and gives them preference in the admissions decisions.

All of that isn’t lost on Wolf.

He is calling on the state House of Representatives to send him the Senate-passed legislation to provide $600 million of state funding for these four state-related schools that combined are serving about 130,000 Pennsylvania students.

“It is long overdue for the House to approve this essential funding and no longer hold our students and universities hostage,” Wolf said in a statement issued Monday. “There is no more time for excuses, and if the House fails to act as they have for months, these institutions of higher learning will be forced to increase tuition. After years of drastic cuts by the previous administration, we have increased funding for higher education in the commonwealth. We cannot go backward.”

The governor applauded the Senate’s passage of the universities’ funding bills nearly three months ago and urged the House to follow suit “and no longer put unnecessary stress on our schools, students and their families.”

Senate Appropriations Committee Chairman Pat Browne, R-Lehigh County, reinforced the gravity of halting state funding for these universities when discussing ongoing efforts to close out this year’s budget with reporters on Monday.

“We need to be able to provide a funding source for them. The exposure relating to them is huge. It’s not insignificant in terms of what the impact of not being able to provide that funding. It’d be the first time in generations that we have not been there,” Browne said.

Last week, Wolf spoke personally with the leaders of Penn State, Pitt, Temple and Lincoln about his commitment to fund the schools. Students from the universities have been urged by their presidents to reach out to state lawmakers through emails and phone calls asking them to spare them a tuition increase.

While the governor is urging lawmakers to pass a natural gas severance tax to help pay for the state support to these universities, spokesman J.J. Abbott said if the House passed legislation to fund the universities and vet school without also passing a way to fund them, “Governor Wolf would work to find a way to fund them. Obviously, the responsible and fair thing to do is to pass these with the revenue to pay for them.””

House Majority Leader Dave Reed, R-Indiana County, said recently the House would like to send over the universities’ funding bills, but there has to be a way to pay for them. He then blamed the Senate Republicans for not acting on an expansion of legalized gambling legislation, which could help to raise money to pay for the state support to the universities.

What’s different about this year’s higher education funding debate

It’s not unusual in a budget dispute for the approval of funding bills for the state-related universities to be delayed because their “non-preferred” status makes them a second priority in the budget. But observers say this year’s delay feels different and not in a good way.

“We feel the threat is truly there that unlike in previous years, we might not get funded at all,” said Zack Moore, Penn State’s vice president for government and community relations. “We set our budget in July with the assumption that we were going to get a certain amount of funding from the state. For them to potentially not follow through on that really puts us in a bind and has us incredibly nervous.”

It has Penn State contemplating the possibility of raising tuition as early as the spring semester.

Moore said if the state appropriation for the university still hasn’t come through by the time Penn State trustees meet in November, he suspects that a mid-year tuition hike would likely be a topic of discussion at that meeting.

“What’s at stake for us is approximately $230 million for our [operating] budget, another $22 million for Penn College of Technology in Williamsport, and $52 million for ag research and extension service that we run for the state,” Moore said. “We don’t have $300 million in reserves that we can just fill the hole.”

Penn State officials are combing through the budget to look for places to make cuts to minimize how much more it would have to charge students in an effort to be sensitive particularly to low-income students who simply can’t afford to pay more, he said.

At the same time, they are keeping their fingers crossed that the funding comes through as it has on a regular basis for Penn State since 1887, for Temple since 1965, for Pitt since 1966, and for Lincoln since 1972.

“We’re in such a place of efficiency right now that if it did happen, yeah, it’s going to hurt” if the $14.4 million in state funding doesn’t come through, said Maureen Stokes, Lincoln University’s associate vice president for communications spokeswoman.

Some even question if Lincoln can survive without the state funding, but Stokes wouldn’t comment on that possibility or any other action the university might have to take. “It’s not that we’re denying the reality,” Stokes said. “We’re just really believing [the appropriation] is going to happen.”

At University of Pittsburgh, which built its budget with the expectation of receiving $150.6 million in state funding, the consequences of not receiving that funding would be “immediate and severe,” said its media relations director Joe Miksch.

“This lack of action will impact thousands of students, faculty and staff and their families while undercutting the critical role that Pitt plays in advancing the prosperity and well-being of our state,” he said. “If funding of this magnitude is lost, the university would be forced to evaluate the financial impact on its regional campuses and likely make some hard decisions.”

Temple University President Richard Englert wrote in a recent editorial on Philly.com that its in-state tuition discount would end if the $150 million it anticipated receiving from the state doesn’t come through.

Moore said without a state appropriation, he can’t imagine Penn State would continue to differentiate its tuition for in-state and out-of-state students. That could create a hardship for students who attend its commonwealth campuses and have a significantly lower average family income than those who attend the University Park campus.

“We hope we never have to face [that], but if we think about it logically that seems to be the logical conclusion. But again, we hope we never get there,” Moore said. “I think that legislators find value in the fact that 55,000 of their constituents [who attend Penn State or Penn College] receive, on average, a $10,500 tuition reduction or savings.”

The impact of losing state funding for agriculture extension and research also would impact those programs before the fiscal year is out, he said. Not only would Penn State lose the $52 million in state funds but it also would have to return $22 million in federal funding it receives that requires a state match.

Unenjoyable consequences

Senate Majority Leader Jake Corman, R-Centre County, called the potential divestiture of the four state-related institutions “a profound policy decision that I think will have significant consequences the people of Pennsylvania will not enjoy.”

Although the flagship campus of Penn State sits in his district, he said he isn’t worried about the economic impact of not providing state funding to the university would have on that region. Students will still attend University Park but they might be wealthier or come from out of state or other countries.

That’s a scenario that Poliakoff said wouldn’t serve taxpayers well or Pennsylvania students.

“There has to be a better solution,” he said. “The partnership is so important to think about how the state and its universities come to an agreement where universities serve first and foremost the people of the state. That’s not going to happen if these universities are privatized.”

Granted, not everyone is fans of continued state funding for the state-related universities that are subject to fewer public disclosure requirements under the state’s Right to Know Law than other parts of state government.

Some fiscal conservatives believe it’s time for these universities to return to their private roots. (Penn State didn’t acquire its land grant status until eight years after its incorporation in 1855, according to the university.)

There are some, too, who dislike the favoritism the state shows to certain universities and would prefer a different funding model.

 “If the goal is to reduce the costs of higher education, we should move to student-based aid that can be used at any institution, rather than subsidize politically chosen universities,” said Nathan Benefield, vice president and chief operating officer of the conservative-leaning policy center Commonwealth Foundation.

A conversation about higher education goals, though, is not what is driving this potential withdraw of state support for Penn State, Pitt, Temple and Lincoln. It’s lawmakers’ inability to arrive at a compromise on how to raise the money to pay for them that is.

“It’s kind of making a decision by not making decision,” said former state Education Secretary Eugene Hickok, who now lives in Virginia but keeps up with political affairs in Pennsylvania.

He’s betting the significance of this inaction is not lost on lawmakers and it goes beyond the financial implications to symbolic ones as well.

“It sends the message that these institutions are not a very high priority for the state,” he said. “The last thing you want as a state is to tell the rest of the country that higher education is not as important here as it is in other states.”