UNIVERSITY PARK, Pa. — As Pennsylvania’s public flagship university and sole land-grant institution, Penn State has enjoyed a long and mutually beneficial relationship with the commonwealth that dates back to its founding in 1855. This partnership has helped Penn State to provide generations of Pennsylvanians with a world-class education and improve the quality of life in communities across the state through its three-part mission of teaching, research and service.

Penn State is able to carry out that mission thanks to annual appropriations from the state, which for the 2021-22 fiscal year totaled $338.96 million. As part of the state budget process, this funding is provided to the University in four categories and, for the 2021-22 fiscal year, breaks down as follows:

• $242.1 million for Penn State’s general support appropriation.
• $54.96 million for Penn State Agricultural Research and Extension.
• $26.7 million for Pennsylvania College of Technology, a special-mission Penn State affiliate.
• $15.2 million for Penn State Health and the College of Medicine.

Collectively, this funding is used to educate Pennsylvania students from every corner of the commonwealth and from all walks of life; support the agriculture industry and deliver related programs and services in all 67 Pennsylvania counties; and provide Pennsylvania communities with high-quality medical care.

“The importance of state funding in allowing Penn State to carry out its mission on behalf of Pennsylvanians is immense,” said Penn State President Eric J. Barron. “From enabling the University to provide a lower in-state tuition rate that benefits thousands of Pennsylvania students and their families, to the programs, resources and know-how offered by Penn State Extension, to access to top-quality care through Penn State Health, the impact of our appropriations can be felt in every community across Pennsylvania.”

The general support appropriation is the largest and, for most Pennsylvanians, the most recognizable piece of the University’s state funding. It is because of the general support appropriation that Penn State can offer an in-state tuition rate that averages $13,300 less per year than the nonresident rate, directly benefiting approximately 45,000 Pennsylvania resident undergraduates University-wide.

For Lexi Barilotti, a third-year student from Drexel Hill, Pennsylvania, who is double-majoring in corporate innovation and entrepreneurship and political science, cost was an important consideration when making her college choice, and she said Penn State was “incredibly affordable” for the quality of education she knew she would receive.

“Penn State's in-state tuition rate impacts me every single day, as it allows me to continue working toward my degrees,” said Barilotti, who serves as president of the Lion Caucus student organization at Penn State. “As someone who chose to come to Penn State because of the affordable and world-class education, in-state tuition is an incredibly important part of my time in Happy Valley. Given that Penn State has such a wide demographic of students who are from various backgrounds and economic statuses, it’s integral that we give all students an opportunity to obtain a degree that will give them a path forward in the commonwealth.”

The general support appropriation makes up approximately 10% of Penn State’s academic budget and is one of two main sources of income that enables Penn State to achieve its academic mission — with the other being tuition dollars — meaning that any change in the appropriation directly impacts resident tuition. Together, tuition and fees and the state appropriation account for 85% of Penn State’s education budget, with the remainder comprised primarily of funding from the federal government for the facilities and administrative infrastructure that supports Penn State’s research activities.

Because Penn State is a state-related institution and is not state owned, its general support appropriation is not funded by the state’s omnibus budget bill. Instead, as one of four state-related universities — the others being the University of Pittsburgh, Temple University and Lincoln University — Penn State’s appropriation must annually pass both chambers of the General Assembly as a separate funding bill by a two-thirds majority vote and then be signed into law by the governor.

If the state at some point in the future were to no longer provide a direct appropriation and instead replace it with an alternative funding mechanism, as some lawmakers have suggested, the result would be a $242.1 million gap in Penn State’s academic budget.

“Without the general support appropriation, there is no in-state tuition discount, and the University becomes reliant on one primary funding source to achieve its education mission, and that is tuition,” said Barron. “As a public institution of higher education, Penn State — and our in-state students and their families — rely on an annual appropriation from the commonwealth to meet our education-related expenses and keep tuition costs relatively low. A direct state appropriation is an irreplaceable keystone of our land-grant model, and it has tremendous value for Penn State, the citizens of Pennsylvania, and the commonwealth itself.” 

Editor’s note: This is the first in a three-part series examining Penn State’s state funding.