Penn State ranks close to worst in affordability for low-income students |

Penn State ranks close to worst in affordability for low-income students

Flagship universities like Penn State’s University Park campus are known around the country for having large research budgets and many resources for both students and faculty.

Penn State ranks close to worst in affordability for low-income students among top public universities, according to a new report by the Institute for Higher Education Policy.

Flagship universities like Penn State’s University Park campus are known around the country for having large research budgets and many resources for both students and faculty. Many, like Penn State, were built using federal land grants to make education on important state issues like agricultural innovation accessible to lower income families.

But according to the IHEP report, only four flagship universities are within reach financially for low-income students — University of Michigan, University of Arizona, University of Wisconsin and University of North Carolina at Chapel Hill. Using five generated student profiles for different income levels, IHEP determined affordability by comparing a school’s net price with Lumina Foundations’ Rule of Ten affordability benchmark, which takes into account student earnings and a “reasonable amount” of savings based on family income.

Penn State students carry the highest debt load in the Big Ten, including those in the lowest income band. Students whose families make under $50,000 annually graduate with an average loan debt of $36,086, according to the 2017-18 Annual Report for Undergraduates.

While 68% of Penn State students receive some type of financial aid, according to the Annual Report, 50% of students carry loans.

The IHEP report found that a student whose family income was less than $15,000 annually, with a $0 estimated family contribution, would still have to pay a net price of $24,123 after gift aid was applied to attend Penn State. After using $3,625 in savings toward the net price, that student would still be on the hook for $20,498 at Penn State.

The report also found middle income students, with family incomes of about $60,000, would be responsible for $31,098 after grants and gift aid were applied. Only high-income students with family incomes over $150,000 would be able to afford the average yearly cost of attendance — $35,068.

Despite these findings by IHEP, Penn State’s leadership and Board of Trustees have made “cost control a key priority,” said spokesperson Wyatt DuBois. He pointed to tuition freezes for three of the last five years and several programs aimed at lower-income state residents, like need-based financial aid Provost Awards, as part of those efforts.

“The university also offers scholarships to students coming from high schools in certain low-income areas, as well as programs to help lower-income students succeed at Penn State and graduate in four years, both of which are significant factors in overall student debt,” he said in an email.

The IHEP report didn’t just measure affordability. It also looked at the number of Pell grant recipients at each flagship. Penn State has a 12% enrollment of Pell grant recipients — one of the lowest out of flagship universities in each state.

DuBois said Penn State’s “unique structure” and process for awarding need-based financial aid doesn’t allow for an “apples-to-apples comparison” and “deflates the percentage of lower-income, first- and second- year students at University Park, and thus lowers the average Pell percentage of the overall University Park enrollment.”

Since Penn State offers a model in which students — many of them Pell eligible — may start at one of 19 commonwealth campuses and finish their degree at University Park, he said, the percentage of Pell eligible students is not fully reflected at the flagship campus. Tuition for upper level students is also higher, he said, which tends to “inflate Penn State’s average cost compared to typical flagships for which the lower and upper division populations are similar in size.”

Pennsylvania, which ranks among the lowest in state support of higher education, also contributes to the affordability issue, said DuBois. Since 1970, state appropriations, which made up 62% of Penn State’s budget, have declined steadily while tuition and fees have climbed. Tuition and fees now make up 80% of the budget while state appropriation covers 11% of the budget, according to data from the University Budget Office.

“As the two major sources of funding for the education budget, it is inevitable that as state funding declines, tuition eventually increases,” he said.

So what can schools and states do? IHEP recommends states restore and increase general education appropriations to all public institutions. Its report also says schools should design need-based aid programs to cover all unmet need for low-income students, including non-tuition expenses which, on average, represent over half of the total cost of attendance.

On a related note, the authors said, “substantial numbers” of college students report having food and housing insecurity, as food and housing are often not covered under grants or gift aid. Pennsylvania Department of Human Services Secretary Teresa Miller visited Penn State in September to highlight the work Penn State’s food pantry Lion’s Pantry is doing to serve students with food insecurity. At Penn State, nearly 50% of respondents in an August campus survey said they had experienced food insecurity in the past 30 days.

The IHEP report also said flagships should try to increase low-income student access by recruiting them more heavily, and ending the practices of early decision and legacy admission. Strong federal and state policy can work hand in hand with increasing low-income student numbers by waiving fees for college admissions tests, providing support to navigate the FAFSA and give federal financial support to states for higher education.

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