Trustees approve 4.5 percent hike in Penn tuition

Penn's increase is the lowest in 30 years, but is among the Ivies' highest. The University Board of Trustees Friday approved an undergraduate tuition increase that has both good news and bad: while the jump was the smallest at Penn in 30 years, it was the largest of the seven Ivy League schools that have already announced next year's fees. At an Executive Committee meeting, the Board of Trustees approved an undergraduate tuition increase of 4.5 percent for the 1998-99 academic year -- raising two semesters' tuition from $22,250 to $23,254. Additionally, students will see a 1.9 percent increase in room and board. With dining costs steady, that represents a 3 percent hike in housing fees -- 1 percent more than last year's increase. With a 3.9 percent increase in total undergraduate charges, Penn's increase is the second-highest in the eight-school Ivy League in that category, behind Cornell University. Columbia University's charges for next year have yet to be released. Even with a new price tag of $30,490 a year, the cost of a Penn education remains lower than that of most of its Ivy League peers -- topping only Cornell by about $60 a year. "We are a tuition-dependent school," University Budget Director Mike Masch said, adding that student tuition and fees comprise 61 percent of Penn's total operating budget. Increases in total charges fund the "basic academic enterprise," and support facility renovations, deferred maintenance projects, technology initiatives, faculty salaries and new academic and residential programming, he said. Citing the University's $2.89 billion endowment -- among the lowest on a per-student basis in the Ivy League -- Masch explained that Penn may have to spend tuition money on "necessities," whereas other universities can afford to spend tuition revenues on "luxuries." For example, other Ivies use endowment funds to cover the cost of their financial aid costs, while Penn must fund aid out of tuition money. "They just have more money than us and we're competing for the same students," Masch said. "How do we compensate for that?" Some facility projects will be funded by outside sources, not tuition. For example, the $69 million Perelman Quadrangle project, designed to create a student center linking several renovated buildings on campus, is being funded by outside gifts and bond issues, Masch said. Masch also repeated administrators' previous assurances that the Sansom Common complex will not rely on tuition as a source of funding but will instead "pay for itself" through revenues from the building's bookstore, hotel and retailers. He noted that the tuition increase is lower than the projected 4.5 percent growth rate in family income. Tuition for the current year increased by 5.3 percent over 1996-97. And Board of Trustees Chairperson Roy Vagelos lauded the administration's efforts to contain the rising costs of running a University. He stressed that Penn must offer competitive salaries partially funded by tuition to prevent rival schools from luring away top professors. Citing the current 2 percent rate of inflation, Masch said "the year that tuition will remain the same is the year that you don't have to pay more for a book or a movie, and no one tries to steal any of your faculty." But last summer the board cited non-tuition revenues, such as the new "cashless" PennCard, recently-established master's programs and outsourcing ventures, as generating significant funds to control tuition. According to Masch, however, Penn has yet to reap the rewards of administrative streamlining. "A lot of things we've initiated haven't kicked in yet," he said. "If Trammell Crow is going to save us money, it's going to take a couple of years." College freshman Meredith Lazar said the costs of attending an institution of higher education are "getting a little ridiculous." But College sophomore Lori Baluta said she was not surprised by the increase. "It bothers me, but it's something I have to deal with."