Penn State Plans Tuition Increase at University Park, Continued Rate Freeze at Commonwealth Campuses for 2025-26

Penn State's proposed 2025-26 budget includes another tuition increase for University Park students and another rate freeze for Pennsylvania students at Commonwealth Campuses while eliminating a years-long operating deficit, university administrators told a Board of Trustees committee on Thursday.

The board's Committee on Finance, Business and Capital Planning recommended approval of the $9.9 billion budget, including a $2.9 Education and General budget, during its meeting at the Penn State Altoona campus. The full board will vote on the budget, tuition and room and board rates during its meeting at 1 p.m. Friday at Altoona's Harry E. Slep Student Center.

Last July, Penn State introduced a two-year budgeting model, so the budget and tuition rates for the current 2024-25 fiscal year , which began July 1, were already set.

“Our focus is on preparing Penn State for the future and making a great university even greater,” Penn State President Neeli Bendapudi, who has made eliminating the university's budget deficit a goal since her arrival in 2022, said in a statement. “A critical part of that is a balanced budget, as it will provide us with the financial strength to evolve as an institution and invest in areas critical to our mission, including our research enterprise and our academic programs, so that we remain at the forefront of innovation."

TUITION

Tuition increases — or freezes — will be the same in 2025-26 as in 2023-24 and 2024-25.

At University Park, tuition will increase by 2% for in-state students and 4% for out-of-state students. For in-state, lower division students (freshmen and sophomores) at, the increase $402 for a full academic year tuition of $20,468.

Non-resident freshmen and sophomores will see an increase of $1,648 for an academic year tuition of $42,860.

Junior and senior tuition rates vary based on program of study.

Student fees at University Park will increase by $52 for the year (8.3%) to $630

The approximately 18,000 Pennsylvania resident undergraduate students at the Commonwealth Campuses, representing about 43% of the university’s in-state undergrad population, will see no increase. Out-of-state undergraduates and in-state graduate students at the Commonwealth Campuses will have a 1% increase and out-of-state graduate students will see a 2% hike.

Tuition varies by location for the 19 Commonwealth Campuses. For lower-division undergraduates, rates ranging from $13,568 per year at Shenango to $15,388 at Altoona Berks, Erie and Harrisburg will remain steady.

Out-of-state undergrads at the Commonwealth Campuses will see increases between $232 and $264 in 2025-26.

Student fees at the Shenango campus will increase by $28 to $484 for the year, and all other Commonwealth Campuses will have a $32 increase to $618.

Tuition for all World Campus students will increase by 1% ($77 per semester or $154 per academic year).

“We know that these decisions have real impacts on the personal finances of our students and their families,” Bendapudi said. “That is why we have held tuition flat for 18,000 in-state students at the Commonwealth Campuses for the third year in a row and implemented modest tuition increases for all other students at the remainder of our campuses that are line with the percentage increases seen in recent years.”

Sara Thorndike, senior vice president for finance and business, told the committee that the increased tuition revenue would be used toward 3% salary increases for education and general budget-funded faculty and staff, a 4% increase for graduate assistantships, expenses associated with new federal overtime regulations, debt service, financial aid, faculty and staff promotions, faculty professional development and study abroad programs.

It will mark the fifth consecutive year that Penn State has had some form of tuition increase. The university also has not received an increase in its general support appropriation from the commonwealth — money it uses to offer an in-state tuition rate that is $15,000 less than out-of-state — since 2019-20.

Penn State receives the lowest funding per in-state student of all state-related and state-owned universities in the commonwealth at $5,757, a reason cited by the university for its place as one of the most expensive public colleges in the country. Pennsylvania plans to implement a new performance-based funding model, which has been endorsed by Bendapudi, for three state-related universities (Penn State, Pitt and Temple) in 2025-26, which Penn State is hopeful will improve its state funding.

ROOM AND BOARD

The standard housing and food rate at University Park will increase by 3.21%, or $216 per semester, to $13,880 for the full academic year in 2025-26. That includes a double room at $4,039 per semester and a mid-level meal plan at $2,901 per semester.

Commonwealth Campus standard room and board rates will increase by $92 or $141 depending on the campus.

Increases are needed, Thorndike said, to cover rises in food costs and operating expenses, as well as debt service for Housing and Food Services' capital plan. As a self-sustaining unit, it does not use tuition or state funds and must cover all operations, construction and major maintenance costs

"Penn State is committed to controlling all facets of a student’s cost of attendance, and this includes our housing and food rates, which remain well below the Big Ten average,” Thorndike said. “Despite significant inflationary pressures, we have worked hard to minimize cost increases for our students while still providing them with a high-quality living experience in well-maintained facilities. We strive to provide housing and food rates that are competitive in each campus’ local market and that are in line with the resource needs of our students.”

University Park's 2024-25 standard room and board rate is seventh lowest among the 18 schools in the Big Ten and lower than Penn State's state-relate university counterparts Pitt and Temple, administrators told the board committee.

BALANCING THE BUDGET

Penn State reduced its Education and General budget deficit from $44.5 million to about $7 million in 2023-24, a figure that Thorndike said may improve further before the books are closed. The bulk of that is due to cost savings for services and employee attrition.

The university still faces "significant headwinds," Thorndike said, including inflationary increases, $83 million in annual salary increases, a pending contract with Teamsters Local Union 8 with a 20% increase over four years totaling $38 million and an employee benefits cost increase in 2025-26 of $24 million.

To get to a balanced budget for 2025-26, the university is reducing or reallocating $89 million in expenses, including budget reductions of $11 million for academic colleges, $29 million for administrative and student-support units and $49 million for the Commonwealth Campuses.

Commonwealth Campuses will, however, get a combined total of $31 million in provost-provided operating subsidies to mitigate larger budget reduction and up to $20 million of the president’s strategic fund to help balance their budgets for 2025-26.

The voluntary buyout program offered to eligible Commonwealth Campuses in the spring resulted in a savings of $43 million, though the final impact won't be known until later this year when the university determines which vacated positions need to be backfilled.

The 2025-26 budget also includes an $11 million permanent operating subsidy for the College of Arts and Architecture and College of Nursing, and a one-time subsidy of $9 million for other colleges.

"Reaching this point has taken hard work from so many dedicated Penn Staters," Bendapudi said. "I know it has not been easy, and there will need to be continued commitment to address these challenges. However, the efforts we have undertaken to strategically reduce expenses, transform how we allocate our resources, improve efficiencies, and grow our revenues — while still delivering a world-class educational experience for our students — have placed us on a sustainable financial path and set us on a course for a bright future.”

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