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Students and visitors are seen at the Perelman Quadrangle on Nov. 5, 2021. Credit: Jesse Zhang

Penn’s Board of Trustees approved a 2.9% tuition hike for the 2022–2023 academic year and the largest increase to the undergraduate financial aid budget in the last decade.

Administrators announced the 2022–2023 student charges at the Board of Trustees’ Committee on Budget and Finance meeting on March 3. Undergraduate tuition costs will total $81,340 next year, up from the $79,014 charged for the 2021–2022 academic year. The increase will account for rising expenses due to inflation and support the University’s growing financial aid program, faculty and staff, and interdisciplinary academic offerings.

The 2.9% increase in tuition is slightly larger than the 2.8% increase the year before, which was the lowest year-to-year percentage increase in more than five decades. The University’s strong financial performance in the past year allowed for it to continue a more modest tuition hike compared to the average increase of around 3.9% over the past 10 years, Penn Today reported.

For the 2022–2023 academic year, Penn will charge $56,212 for tuition — up from the previous year's $54,652. Housing will rise from $11,358 to $11,754, and dining will rise from $5,946 to $6,134. 

The 2022–2023 academic year will be the first time that undergraduate costs will total more than $80,000, according to The Philadelphia Inquirer

Undergraduate fees, which will rise from $7,058 to $7,240, cover the cost of student support services, technology services, and Penn Wellness services. 

For the 2020–2021 academic year, fees also covered COVID-19 public health measures such as contact tracing and testing. Trevor Lewis, Penn's vice president for budget and management analysis, wrote in an emailed statement to The Daily Pennsylvanian that undergraduate fees will continue to partially fund COVID-19 public health measures for the 2022–2023 academic year. 

The 2.9% tuition hike will be accompanied by an 11.1% increase in the aid budget from $259 million to $288 million, an increase not seen since before the Great Recession in 2010. 

Currently, 44% of undergraduates currently receive financial aid in the form of grants, a 2% decrease from 46% in 2021. These undergraduates are given an average of $60,506 in funding — over $4,000 more than next year’s cost of tuition. 

"This 11.1% increase to the financial aid budget for FY23 is driven by our estimation that the percent of the undergraduate class receiving need-based grant aid will return to the higher end of the range from the past 10 years, which has been between 45% to 47%, up from 44% in FY22," Lewis wrote.

He added that the Office of Budget Planning and Analysis is analyzing the financial aid awards for the current year to understand why the percentage of undergraduates receiving grant-based aid dropped to 44%.

“It was important to us that we continue to keep cost increases low while simultaneously bolstering our grant-based undergraduate financial aid program,” Senior Executive Vice President Craig Carnaroli told Penn Today

The above-average increase in financial aid funding comes after Penn and 15 other top universities were sued for allegedly colluding to limit financial aid. Former Penn spokesperson Stephen MacCarthy previously declined the DP's request for a comment on the litigation.

At the Board of Trustees’ meeting on March 4, Carnaroli said that the University’s revenue for the three months period that ended Sept. 30, 2021 totaled $3.5 billion, up 18.5% from a year ago, while net assets totaled $27.3 billion, an increase of 36% from the year prior. He attributed the increase to financial markets and the Power of Penn campaign launched by former Penn President Amy Gutmann. 

Roughly one-third of Penn's revenue is derived from undergraduate tuition and fees, according to Lewis. 

Penn’s 2.9% tuition increase is on the lower end of its peer institutions that have approved their 2022–2023 tuition costs thus far. Princeton University and Brown University have both also approved a 2.9% tuition increase. The tuition hike at Cornell University ranges between 3.6% and 3.9% depending on the school, while Yale University’s total undergraduate charges will go up 3.8% next year.