Cost of Penn education to rise slightly to $50,000

Getting an education at the University of Pennsylvania next year will cost just shy of $50,000 under a plan to be voted on today by the school's Board of Trustees.

Tuition would increase 3.75 percent to $34,868 - the lowest percentage increase in 41 years, officials said.

Overall, tuition, fees and average room and board costs will rise 3.8 percent to $49,986 under the plan.

The proposed fees were approved yesterday afternoon by the board's budget and finance committee, which also heard a report that the university's endowment had plummeted by 19 percent or $1.2 billion to $5.1 billion as of Dec. 31. The endowment was worth $6.3 billion on June 30.

University officials said that despite - and because of - the economic turmoil, they sought to keep tuition increases as low as possible.

"For a university as heavily dependent on tuition and as deeply committed to need-based financial aid as Penn, curtailing the tuition increase will intensify budgetary pressures on all of us," president Amy Gutmann said in an e-mail to the Penn community. "But with the mounting financial stress that many of our students and families are experiencing right now, we feel a responsibility to relieve some of their pressure by tightening our own belts further and by continuing to manage our investments prudently."

Penn officials emphasized that the university also will increase its financial aid budget by 15 percent or $17.6 million, to $137 million, to more than offset the tuition increase for students who need aid to attend.

University officials said financial aid will not be affected by the drop in the endowment. Only about 15 percent of the university's financial aid is dependent on endowment revenue, said Bonnie Gibson, vice president for budget and management analysis.

The university also announced a number of cost-saving measures, including slowing faculty hires in some departments, canceling or postponing capital projects, and forgoing executive raises. Collectively, the efforts are expected to save $57.7 million through June 2010, Gutmann said.

If the tuition increase is approved, Penn would join a growing number of universities around the country adopting their lowest tuition increases in decades as the economy plummets.

Princeton University this month announced a 2.9 percent increase in tuition, fees and room and board, its lowest since 1966. Students will pay $47,020.

Villanova University approved a 3.5 percent increase in tuition, its lowest since 1973. Incoming students will pay $38,240 in tuition. Overall, tuition, fees, room and board will climb to $49,160.

Around the country, experts expect tuition and fee increases to be in the 3 percent to 4 percent range as opposed to the 5 percent to 6 percent range of prior years.

Penn also will complete the roll-out of its financial aid policy that eliminates loans for all eligible students in favor of grants.

In 2008-09, all undergraduate students with family incomes of less than $100,000 received loan-free grant packages. This year, there will be no income cap.

A Penn student from a family making less than $90,000 will have tuition fully covered by a grant. A student from a family with income less than $40,000 will not be expected to pay tuition, room or board, Penn officials said.