UPUA Votes Pave Path for Future Tuition Increases

UPUA voted down Al Lord's resolution to complete the Freeh investigation and supported proposal A+ on board reform.  Those decisions ultimately will result in future tuition increases.

By
Ray Blehar

This morning upon learning that the University Park Undergraduate Association (UPUA) had voted down Al Lord's resolution to complete the Freeh investigation (under the false pretense that the resolution called for a   re-investigation) and supporting BOT reform proposal A+, I made the following comment on a report by OnwardState.

Their vote to support A+ -- which is nothing more than the OGP ensuring that they stay in control of the BOT - shows that the UPUA didn't look beyond the carrot it was offered when it voted on the resolution. In other words, they didn't look at the "stick."

The "stick" I was talking about was the future tuition increases students will face as a result of a stacked BOT membership that will do nothing to change the status quo.  In short, future tuition increases were the cost the UPUA was willing to "pay" for a seat at the table.

Neither the OnwardState or The Collegian reports made any mention of any debates about how these two resolutions will impact tuition.    As it turns out, the resulting tuition increases will fall under the "law of unintended consequences" and perhaps can be used as a learning experience by the UPUA.

The Hows And Whys of the 2013 Tuition Increase

Between 2012 and 2013, tuition and fee payments by students rose by approximately $40 million dollars, from $1.508 billion in 2012 to $1.549 billion in 2013.  After the vote by the BOT to increase tuition, then-President Rodney Erickson stated (my emphasis added):

Erickson: "unavoidable cost increases" ??
mandated higher tuition fees

“Before considering an increase to tuition and fees, we identified expense reductions of $35.9 million and delayed planned budget increases for the capital improvement plan and deferred maintenance. The unavoidable cost increases that could not be funded by internal budget reductions and reallocations are what constitute this increase” 

At this point, I hope that most have already figured out those "unavoidable costs" that couldn't be funded happen to be costs "assumed" by PSU for the fallout of the Sandusky scandal.  These costs were not "unavoidable" as Erickson stated.

Expenses
Obviously, the best example of an avoidable cost in 2013 was the $59.7 million that PSU volunteered to pay the Sandusky victims despite the fact that civil liability for the abuse had never been established.   Also, the $12 million in fines that PSU agreed to pay that year also was an avoidable cost.  As were many of the legal fees had the Administration and Board decided to defend its employees, rather than throw them under the bus.

Revenues
On the other side of the coin, tuition had to be increased due to  losses in revenues as a result of the BOT's decisions.  Ad Age estimated revenue losses over $1 million in advertising.  An athletic department that once funded all of PSU's sports is now in the red due to severe revenue losses since 2012.

And despite what the Old Guard Plus (OGP) tells the public about donations and giving, that took a major hit too.


In short, tuition was increased because funds from the institutional support budget were used  to pay the "unavoidable costs" of the scandal -- instead of being used to make up the shortfall between the projected revenues and  expenses for instruction, academic support, and student services in 2013.  PSU went from a positive total cash flow for the year ending June 30, 2012 to a negative total cash flow for the year ending June 30, 2013.

Future Tuition Increases

In late mid August, the PSU BOT voted to accept the the conditions of a proposed settlement in the Corman v. NCAA lawsuit which would result in the University's payment of $60 million in fines over five years (which commenced in 2012).  In addition, the PSU BOT decision not to reject the Consent Decree resulted in the continued punishment by the Big Ten Conference, which will keep any bowl revenues earned by PSU.

Additionally, at least three victim lawsuits are pending that could result in even greater payouts.  The notes to the PSU financial statements also reveal that the lawsuits "could have a material adverse effect on our current and future financial position, results of operations and cash flows."   In each of the pending cases, attorneys are utilizing the language of the Freeh Report to make their cases against PSU.  In summary, the continued expenses of those items and other litigation related to the Sandusky scandal will eat up future funds that could have been used to defray tuition costs.

Conclusion

The best way for Penn State to regain its financial health is for the Board to publicly reject the Freeh Report on the grounds that it is 1) erroneous, 2) incomplete, and 3) an embarrassment to higher education.  Any student who would have turned in a paper as sloppy and structurally deficient as the Freeh Report most assuredly would have received an "Incomplete" grade or an "F."

Conversely, the decision to accept proposal A+ will lock PSU into the future expenses noted earlier, as the voting power will remain with the OGP, who have no intention of admitting they made poor decisions in the aftermath of the scandal, that the Freeh investigation was a sham, and that Freeh's resulting report was worthless.

My LTE of The Collegian....we'll see if they print it....

Subject: March4Truth Co-Organizer Responds To Another False Narrative

I read the Collegian editorial, "Vocal Alumni Minority Are Impeding Progress," with great interest, considering that I co-organized the March4Truth and have spent over a year investigating the facts of the Sandusky case.  As an analyst and investigator with 28 years experience, who has investigated international incidents of considerable importance, I can assure the Penn State student body that finding the "truth" of the Sandusky matter is in all of our best interests.

I was a bit taken aback by the statements made by UPUA President Katelyn Mullen and the author who believe that the "alumni antics reflect negatively on current students" and that the "actions of a vocal minority are defining us as a school."  Ironically, this is clearly a case of misplaced blame on the "vocal" alumni and it is quite similar to the scenario of the blame for Sandusky's crimes being placed on Penn State. 

In other words, another false narrative.

The reason that Penn State has been defined as a school that enabled child sexual abuse is because the PSU Board of Trustees failed to defend our University against false allegations of failing to report Sandusky's crimes.  Morevoer, the Board's failure to refute the Freeh Report caused the NCAA to levy sanctions and penalties that, to the public at large, defined Penn State as a school of child abuse enablers.

The "vocal" alumni had nothing to do with either of those ill-fated decisions.  In fact, we opposed them.

Most students are too young to remember when the NCAA gave Southern Methodist University the death penalty in 1987, however, it was a black mark that has hung on SMU ever since.  A few years ago, ESPN made a movie about the scandal called "Pony Excess."  As I write this, another movie starring Al Pacino as Joe Paterno will document the Sandusky scandal's false narrative and be shown to millions of people.

The NCAA sanctions on PSU will result in a similar black mark that will hang on this University for the next 30 to 50 years, if not the rest of our lives.

Unless, the truth is revealed.

The PSU BOT wants us all to "move forward" in the best interests of the University.  They say look to the future -- but only because they don't want to be held accountable for the damage they have inflicted on Penn State.  

When you are asked about the Sandusky case in a job interview, it is because the BOT accepted guilt for the scandal - not because the alumni are expressing dismay in the school's leadership.  Almost none of the publicity about the scandal to date has anything to do with the "vocal" alumni and everything to do with the failure of the Board to defend PSU and its administrators. The fact of the matter is that future media coverage of the Sandusky scandal is inevitable because of the pending court cases of PSU officials - again, not a result of the "vocal" alumni, but of the BOT, who threw these men "under the bus."  

So, the concept of "moving forward" to avoid publicity about the scandal is not only flawed logically, but practically.

Next, if you believe you were the only people affected by the scandal because you were on PSU's campus, you are quite wrong about that.  Talk to alumni who were denied promotions or not hired because of it.  Talk to alumni whose cars and homes were vandalized because they displayed PSU's "colors."  Talk to alumni who have had to answer the similar questions, as you have during job interviews, about the scandal.  I would submit that our experiences were possibly worse than yours, considering we are surrounded by graduates of other schools while the population you exist in is rather homogenous.  Your community was supportive and had empathy, while the majority of our communities were not.

Another area where we may differ is in how we reacted to the scandal and the allegations levied on PSU that resulted in such destruction.  And perhaps that is a matter of life experience.

The most important thing I can ask of you, to perhaps understand why the alumni protested to demand the truth and "due process," is that you "walk a mile in another man's shoes."

Imagine if you returned to your dormitory or apartment to find a phone message or e-mail waiting for you.   The message simply tells you to call an individual at a certain phone number.  You dial the number and, after confirming your identity, the person on the other end of the line says: "You are no longer a student at Penn State University."   You are told you were expelled because of allegations of academic fraud that have not yet been proven.  The professor who made the allegations is highly respected by the Administration, thus no examination of the evidence is performed.  Your guilt is simply based on the professor's allegations.  You are not given an opportunity to speak in your own defense nor is there any process for redress.

Two weeks after that, you receive a letter informing you to return your student ID card and other property that PSU determines you owe the Unversity.  This letter formalizes your expulsion and it is made public that you were expelled for academic fraud.  The public now knows you were expelled for academic fraud, thus you must be a "flawed" individual.  Some in the public refer to your "flaw" as "tragic."

What would you do?  Move on?  Put Penn State behind you, even though the record will show that you're a cheater and have a flawed character?

Apparently, you would.  That's what you're telling the alumni to do.

But here's the rub.  This is not about one person.  It's about 600,000 people who get called "pedophile enablers" and will continue to bear that label until the record is corrected.

This is where we "vocal" alumni are coming from.  We understand that a school that we love was unjustly maligned, just as good men's reputations were damaged or ruined without due process.

The "vocal" alumni know that revealing the truth about the Sandusky Scandal is the ONLY thing that will remove the black mark put on our school and on all of us.  Moving forward is not the answer.

I would welcome the opportunity to engage the students in dialogue about the facts of the scandal in the near future.

For the glory,

Ray Blehar, Honors Graduate,

Penn State Smeal MBA, Class of 2008

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