Penn State aims to grow University Park enrollment as population at other campuses wanes

PHILADELPHIA — As enrollment declines at its Commonwealth campuses, Pennsylvania State University is aiming to grow the first-year student body at University Park over the next few years.

Nearly 9,200 freshmen attend the main campus this fall. Eventually, the school would like to reach 10,000, said Matt Melvin, vice president for enrollment management.

"It's really in response to demand," Melvin said, noting that University Park received more than 106,000 applications for summer/fall 2024. "We are in an enviable position in the market because of that demand."

Penn State's overall acceptance rate for summer and fall 2024 was 79%. But at University Park, it was 50%, meaning half the students who want to go there are not admitted. The university's overall yield rate — the percentage of students accepted who enroll — is 15.6%; at University Park, it's 17.4%.

The university's board of trustees voted last month to enter a ground lease agreement for a new 1,500-bed housing development aimed at upperclassmen. Under the ground lease, the university owns the land but the development will be constructed and operated by Greystar Development East LLC. The move comes as the university attempts to make more room for freshmen.

"As we admit more first-year students, since there is a live-on requirement that will use up more of our own inventory, we wanted those students who are non-first year ― who would traditionally choose to live with us ― to still have another option and an affordable one," said Sara Thorndike, senior vice president for finance and business.

University Park has about 15,000 beds and runs close to capacity, Melvin said. About 775 beds will be available at the new residence hall in fall 2027 and the rest by the following fall.

Growing at a time of nationwide drops

All but one of the more than 30 trustees approved the lease agreement. Barry Fenchak, who has an investment advising practice in State College, voted no, saying he didn't think it was a good idea to increase enrollment at the main campus, given the enrollment struggles nationally at colleges. Nationwide, freshman enrollment dropped 5% this fall, in part because of the botched rollout of federal financial aid forms known as FAFSA, and there are predictions for more declines as the number of high school students falls.

Fenchak questioned the impact on yield and noted the school's desire to attract more out-of-state students who pay higher tuition. About 58% of Penn State students are from Pennsylvania.

"We are already digging far, far deeper into our applicant pool," he said. "And if we put ourselves in a position where we have to increase enrollment, that is only going to exacerbate those concerns."

But Melvin said because the increase will happen slowly, the university will have time to build up support services for student success.

"We feel like we can meet [our] mission by expanding and not harming ourselves in terms of strong outcome variables," he said.

Richard S. Sokolov, board vice chair, said at a committee meeting where the housing project was discussed that the board at a recent retreat had been talking about ways to increase opportunities to attend University Park and the need for more housing to accommodate students. This project does that without Penn State having to build a new residence hall.

"What this does is the equivalent of having a private entity invest hundreds of millions of dollars to build an asset that is going to enable us to increase enrollment, drive income, and generate substantial financial gain with zero risk, if, for whatever reason, let's say there was another pandemic and there was a problem with people attending," said Sokolov, vice chairman of Simon Property Group, based in Indianapolis. "They still have to pay the ground rent, they still have to pay their mortgage, they still have to operate this building."

Melvin acknowledged enrollment challenges, including the public's increasing scrutiny of the value of higher education. He also cited more opportunities for training programs.

But Melvin said the university also is increasing recruiting efforts, including paying more attention to Illinois, which he called the "new New Jersey." For years, New Jersey has been among the top states for exporting high school graduates to colleges elsewhere.

Melvin said he didn't think the effort to grow University Park enrollment would hurt the Commonwealth campuses, which attract students seeking smaller classes closer to home.

"They are very different populations," he said.

A way to grow revenue

Enrollment has been declining steadily at the Commonwealth campuses. It stood at about 24,000 last June, down about 30% since 2010. This fall, overall enrollment at those campuses fell about 2%, but the decline in first-year enrollment was more steep: 8.4% or 578 students.

More than 380 employees at the Commonwealth campuses — about 21% of those eligible — took a buyout earlier this year.

Meanwhile, the main campus has grown to more than 42,000 students; this fall, enrollment increased by 365 students, or less than 1%.

Across all its campuses, Penn State enrollment this fall is just under 88,000.

Melvin acknowledged that attracting more students to University Park will help increase revenue. The university has been aiming to close a deficit, which stood at $191 million in 2022, by this summer. The university is on track to finish this fiscal year with a balanced budget, a university spokesperson said.