2008-11-27 / Local & State

PSU Faces Budget Challenges

By Genaro C. Armas ASSOCIATED PRESS WRITER

STATE COLLEGE, Pa. (AP) - Penn State University plans to steer clear of higher-than-expected tuition increases to balance the books despite facing difficult budget decisions amid a worsening economy, school president Graham Spanier said Friday.

Penn State has an enrollment of 92,000, counting its 24 campuses statewide and online students. The Board of Trustees proposed increases for the 2009-10 school year of between 4.9 and 5.6 percent, depending on the campus, in its appropriations request to the state in Sept.

That same month, though, the state told the university that it would likely hold back $15 million of previously appropriated money for the current school year due to economic woes.

The university hasn't had to increase tuition at midyear in large part to "defensive measures'' and long-range planning, Spanier said Friday in addressing the trustees.

With prospects of a short-term recovery dim, the university is thinking ahead. Rising costs for fuel and other utilities are among the items that the university must account for amid lower appropriations, a reduced endowment and the credit crunch, Spanier said.

Trustees on Friday did approve an increase to room and board rates of about 5.8 percent, or about $225 per semester for the next academic year at all nine of the university's residential campuses.

But current and prospective students also face tightening family pocketbooks, especially at a university where the tuition for lower-division, in-state students is about $13,000 a year - and almost double that for out-of-state students.

"We're going to do everything we can to leave tuition in the same zone as it has been proposed (in September), and not used to balance the budget,'' Spanier said during a break Friday.

"We would have to have an extraordinary tuition increase to get next year's budget in balance if we wanted to follow through on that earlier plan,'' he said. "We don't think that would be possible or appropriate given the economic circumstances our students and families are facing.''

Instead, there may be significant cuts in other areas, including little or no salary increases. The schedules and financing on some new building projects may be delayed.

The school also announced that Spanier and his wife, English professor Sandra Spanier, have made a new $700,000 philanthropic commitment, increasing their total commitment to $1 million.

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