The University Board of Trustees passed resolutions at yesterday's executive committee meeting, including the approval of an increase in undergraduate student charges by 4.6 percent and additional funding for the movie theater project on 40th and Walnut streets.
Undergraduate student charges for the 2002-2003 academic year will now total $36,212, which is up from $34,614 last year. These charges include $25,078 for tuition, a $2,222 general fee, a $488 technology fee and an estimated $8,224 charge for room and board.
A $200 "recreation fee" has also been added to the total charges, anticipating the completion of the Pottruck Recreation Center this fall.
On average, undergraduate student charges have increased by 4.1 percent a year since the 1998-1999 academic year.
Other resolutions passed during the Executive Session included the authorization of an estimated $13 million in additional funding to complete construction on the movie theater project on 40th and Walnut streets. This extra financial backing will allow the University to finish the cinema portion of the Hamilton Square project and to settle a lease with National Amusements for this space.
The Board also approved graduate student charges for next year, which will total $28,580. This is a 4.5 percent increase from the 2001-2002 academic year.
According to Vice President for Budget and Management Analysis Michael Masch, the hike in student charges can been attributed to both inflation and the rising costs of the services that the University provides for its students.
"We would be very happy if we could recommend no increase in student fees," Masch said. "But we have a basic inflationary increase in the economy, so all wages and costs that we bear are going up."
And University Treasurer and Vice President for Finance Craig Carnaroli said the University would be increasing resources available for student financial aid in response to the tuition increase.
Masch said that the charges that the University incurred rose by approximately 3 percent over the course of Fiscal Year 2002.
"A zero-percent increase would be possible only if we got enough money from some other source," Masch said. "Unfortunately, there isn't any other source of income that we receive that can actually substitute for student charges."
Along the lines of the increase of student charges, Masch noted that the University's commitment to providing students with additional services to enrich their education was the key motivating factor.
"What students get when they come to Penn is changing for the better from year to year in terms of the quality of the academic programs, the quality of extracurricular programs, student services and facilities," Masch said.
Masch said the improvements upon undergraduate residences -- including the renovations to all four Quadrangle college houses -- were the largest expenditure of capital for the University. Now, he said, Penn needs to start paying off the debts it has incurred.
"What we're really paying for now are the Hill Dining and Quadrangle renovations," Masch said. "Those things are done, and therefore we have to start servicing the debt on them."
Masch said that fundraising efforts for the Quad's renovations have reaped a total of $12 million thus far, although the total cost for this project was approximately $75 million.
He added that the University's operational costs have increased as well, partially because of the addition of air conditioning to Quad dormitories.
Penn's $36,000-plus fee for undergraduates ranks ninth among the 16 "Ivy Plus Group" schools for the upcoming academic year. In addition to the seven other Ivy League schools, the list includes New York, Georgetown, Duke and Stanford universities.
According to Masch, these private, full-scale research universities are considered to be Penn's "peer institutions."
Princeton University's student charges of $35,117 for next year is the lowest in this elite group. Harvard University will charge undergraduates $35,950 for the 2002-2003 academic year.
Penn's total undergraduate charges rank lower than that of Cornell and Brown universities, but higher than that of Duke and Yale universities.
Yesterday's meeting also included a presentation on the University's budget and finances.
Through January, Penn has experienced a 1.3 percent return on its endowment. This is favorable in comparison to the University's benchmark figure, which was a decline of 2.6 percent.
In FY 2000, the University's endowment posted a 1.8 percent decline while many peer institutions saw their endowments skyrocket in a booming economy.
Carnaroli noted that during FY 2002, Penn has seen a decline in revenue in its executive education programs, campus dining and its hotels.
Still, Carnaroli remained optimistic about the University's finances for Fiscal Year 2002.
"In spite of the decline in operating activity, both the overall cash and cash flow was consistent for the seven months," Carnaroli said.
The Board of Trustees, the University's top decision-making body, meets in the winter, spring and fall of each year. In addition to these full board meetings, individual committees schedule sessions for additional deliberations throughout the year.
