For the fourth year in a row, the price of a Penn education will increase by 3.9 percent for the upcoming school year, the University announced Thursday.
Total undergraduate charges — including tuition, room and board and other fees — will be $58,812 for 2013-14. Tuition alone will increase from $39,088 this year to $40,594 next year.
The hike was approved by the executive committee of the Board of Trustees.
Although the University has now kept tuition increases below 4 percent for the past five years, it is likely that 2013-14 will mark the last year in which some families will see a bill below the $60,000 mark. If total undergraduate charges increase at the same 3.9 percent rate next year, it will cost $61,105 to attend the University in 2014-15.
As in previous years, Penn’s administration cited rising operating costs as the primary reason for the tuition hike.
“If we’re going to maintain the same size student body and our costs continue to go up, we have to keep raising revenue,” Executive Vice President Craig Carnaroli said. “We never stop looking for ways to keep cost down, but there’s always going to be upward pressure on things like tuition.”
While Penn’s single-year tuition changes may appear small, the University’s increases in cost have added up substantially over time.
The total cost of attending Penn has increased 18 percent over the past five years, and 48 percent over the past decade. In 2004-05, a Penn education was nearly $20,000 less than what families pay today.
Penn’s total charges of $58,812 make the University the second most expensive Ivy League institution — behind only Dartmouth College — that has announced tuition increases for 2013-14.
Cornell, Columbia and Harvard universities have not yet announced total costs for the next academic year.
On Thursday, the University also said it will be increasing its financial aid budget for 2013-14 to $188 million, marking a 5 percent increase over projected aid expenditures this year.
“Through our innovative no-loan program, we are sending a strong and positive message to present and future Penn students: this institution will continue to recruit and enroll the finest students, and no student will need to decline the opportunity to experience a Penn education for financial reasons,” Penn President Amy Gutmann said in a statement.
This year’s rate of increase for the financial aid budget is slightly less than the past two years, when funds allocated to undergraduate aid rose by 7.7 percent.
Since Gutmann took office in 2004, Penn’s aid budget has increased by an average rate of 9.1 percent per year.
Carnaroli said that the lower rate of increase this year was not a “conscious decision,” but rather a reflection of what the University projected it would need to allocate in 2013-14 to maintain the same aid program that saw 46 percent of undergraduates receive need-based grants this year.
Thursday’s tuition announcement has troubled — although not necessarily surprised — some across campus.
“It is very hard to see any rational policy basis underneath it at all besides, ‘Let’s get more and more money, let’s spend more and more money and if we have a problem in future, we’ll deal with it in the future,’” said Graduate School of Education professor Joni Finney, who researches higher education finance. “Costs keep rising, and at some point even an extremely wealthy institution like Penn is going to have to come out and say that enough is enough.”
College junior Mehak Chadha, an international student from India, agreed that the increase is concerning.
“I think it’s quite a bit, especially because I’ve talked to friends at other colleges and we just seem to be paying a lot more here at Penn,” said Chadha, who is not on financial aid.
Finney added that, as tuition continues to rise and the average value of Pell Grants remains stagnant, the impact of government aid on students’ ability to pay for college lessens.
Carnaroli said that the University takes changes in federal aid into account when determining students’ financial needs.
“We’re not insensitive to the families that pay the full amount, but we do have to put all of this in the context that we are need blind, so we’re essentially meeting the full need of students through the criteria we’ve established,” he said.
While Finney praised the University’s aid program as one of the best in the nation, she cautioned that annual tuition increases at a school like Penn can have a much wider “ripple effect” throughout higher education.
“Penn exists in a larger higher education environment, and when Penn and other well-to-do institutions increase their tuitions like this from a high base, it gives license for others to go down the same route,” she said. “That’s not the message that we want to send.”