Dive Brief:

• Leaders of the Pennsylvania State System of Higher Education are asking state policymakers for a 15% funding increase, from $477 million to $550 million next fiscal year. 
• It's a cash infusion they say will help the system continue merging six PASSHE institutions into two new ones, focused on online education and stackable credentials, respectively. It will also support their diversity and inclusion efforts and prevent future budget cuts or tuition increases, system officials say.
• Yet the system's enrollment is down markedly this year, potentially signaling financial headwinds ahead if tuition revenue and headcounts fall in lockstep. PASSHE's enrollment has dropped by about 25% since 2010.

Dive Insight:

PASSHE's Board of Governors in July approved the mergers of Bloomsburg, Lock Haven and Mansfield universities in the northeast and California, Clarion and Edinboro universities in the west, which will cut the number of system institutions from 14 to 10. The move stems from deep financial challenges the system endured over the past decade. 

System enrollment began to plummet in 2010, and lawmakers cut state funding shortly after. The system raised tuition prices, making it harder to afford for some of the low- and moderate-income students it was designed to serve. 

PASSHE Chancellor Dan Greenstein presented the consolidations as salvation from financial ruin. But he came under fire for not pressing for more state funding, even after policymakers committed $200 million to the system over the next several years. More money could have averted the need for mergers, critics said.

The system's governing board voted Thursday to ask for $73 million more in annual funding. The money would be on top of the $200 million, which is one-time funding spread out in $50 million installments over three years. 

"This request is vital to the future and mission of the System,” board chair Cynthia Shapira said in a statement. “It reflects what our data modeling shows will be needed for the PASSHE institutions to operate effectively while remaining affordable, one of our primary goals."

Greenstein has said the system has made strides in reversing troubling enrollment trends at low-attendance schools and addressed affordability by freezing tuition. Fulfilling these goals opens the conversation for more investment in the system, he said.

Sam Smith, a former state House speaker, now a member of the system's governing board, said during a recent meeting of the board that Greenstein should prepare to prove the system's accomplishments to legislators with data, according to PennLive.

However, the system is reporting an enrollment drop of more than 5,000 students, down to 88,651. That represents about $36 million in lost revenue. The enrollment loss reportedly is among both first-year and returning students.

Greenstein told news outlets that the large number of available jobs during the pandemic could have prompted students to forgo college. Faculty had predicted the uncertainty leading up to the mergers would stymie enrollment.

The system on Thursday also announced the new name of the integrated institution in the west. It will be known as Pennsylvania Western University, nicknamed PennWest. Each of the merging campuses will also retain part of their original names. For instance, Clarion will be known as Pennsylvania Western University Clarion.