Over the past few years, Penn's School of Design has consistently been ranked one of the University's most tuition-dependent schools, which means that tuition is its primary source of revenue. The costly space and expensive technology, in addition to the limited research funding and gifts, places PennDesign in a situation with unique challenges.
PennDesign has consistently fallen in one of the top two spots for Penn's most tuition-dependent schools for the past several years, placing first in 2017, according to the school's Associate Dean for Administration Leslie Hurtig.
Sixty-five percent of the school's 2017 budget came from tuition and fees, and this number is projected to increase to 67 percent in the 2018 fiscal year, Hurtig said.
In general, other major sources of funding for graduate schools include gifts, grants, and investment income, the University Operating Budget for 2018 stated.
PennDesign Dean Frederick Steiner said that the school’s tuition dependence is an issue he is working to resolve.
“One of my goals is trying to diversify our funding because right now we’re very dependent on graduate tuition,” he said. For one, Steiner and Hurtig are discussing plans to expand their source of revenue to fundraising and gifts.
Based on the University Operating Budget, PennDesign is projected to be ranked again as Penn’s most tuition-dependent school. It will likely be followed by the Graduate School of Education, which derives 66 percent of its budget from tuition, the School of Nursing (62 percent) and the School of Social Policy & Practice (61 percent).
In contrast, tuition and fees account for only 15 percent of the School of Veterinary Medicine’s budget for this year, Director of Communications and Marketing Martin J. Hackett reported. Based on the operating budget, other major sources of revenue for Penn Vet include sponsored programs and grants from the state of Pennsylvania.
Tuition dependence can be dangerous. According to a 2016 article from Forbes.com, "colleges where tuition revenue accounts for more than 60 percent of core revenues tend to be at higher risk financially.” This is because these schools are vulnerable to annual fluctuations in enrollment — “enrollment shortfalls in a given year can mean budget misses, layoffs and cost cutting."
While several other schools also face issues stemming from being too tuition-dependent, PennDesign faces specific difficulties for being the only studio-based school.
“We’re the only studio-based school,” Steiner said. “That’s a fairly expensive way to deliver education.”
Steiner explained that studios require a lot of space and technology but can only contain 10 to 15 students at any given time. Similarly, Hurtig noted that PennDesign spends a larger percentage of its budget on space than most schools at Penn.
PennDesign also needs to keep up with the “ever-increasing technological advances,” such as 3D laser printing and robotics “to stay competitive with peer institutions," Steiner added.
Various faculty members also noted PennDesign’s distinct funding issues.
“We’re a small school and have all the challenges of being primarily a tuition-supported school,” architecture professor William Braham said. He compared PennDesign to other small graduate programs such as Penn Law and the Graduate School of Education.
PennDesign’s relatively small amount of research also limits funding, Braham continued, as there are fewer opportunities to obtain external research grants. This is a stark contrast to several other small schools that incorporate research into its mission more.
“There’s not as much obvious forms of research that get done in the school, just because of who we are,” he said.
City and regional planning professor Eugenie Birch echoed Braham’s sentiment.
“The potential for funding is not as great as it is, say in the sciences,” she said.
However, Birch stressed that her own teaching has not been affected by the school’s financial situation.
Similarly, PennDesign students do not appear to be affected, and many said they were not aware of the school's funding issues.
School of Design student Alexandra Zazula said that she “genuinely [doesn’t] know anything about funding issues in the School of Design.”
School of Design students Lauren Altman and Jessica Arias also said they were not aware of the school's issues with funding.
Despite financial challenges, Director of Communications Michael Grant said that PennDesign’s annual budget has increased from $43.8 million in 2015 to $46.9 million in 2018. He added that the new funds have been invested in “initiatives that enhance the student experience” such as new technological tools, new staff positions, and a multi-million dollar renovation of Meyerson Hall.
Hurtig added that the school was also increasing its spending on financial aid.
“I don’t think there’s what I would call funding issues,” Steiner said. “That doesn’t mean that like other places we don’t face budget challenges, but I don’t think it’s a big issue.”
Similarly, Braham said that in his 30 years at PennDesign, the school’s financial situation has improved.
“Things actually feel sort of better to me these days than they did a decade or two ago,” he said.