Leadership & Governance

Penn State Enrollment and Gifts Seem Unaffected by $20-Million Scandal

Ralph Wilson, AP Images

Penn State's President Rodney Erickson says problems in faculty recruiting have not materialized: "Most academics have long understood that Penn State is a world-class institution, and it continues to be and it will be in the future."
November 02, 2012

In the year since the Jerry Sandusky scandal hit Pennsylvania State University, rarely a week has passed without new revelations that have cast the institution in a negative light.

The scandal has already cost Penn State about $20-million. But several other important financial barometers suggest the university has made it this far into the crisis relatively unscathed.

Enrollment is up, donations are strong, and the university is more than a third of the way toward fulfilling the recommendations of an independent report that called for widespread changes in its governance and oversight policies in response to the scandal.

On Friday—a day after Graham B. Spanier, Penn State's former president, and two other former top officials were charged with multiple felonies, including conspiring to conceal child abuse, in relation to the Sandusky case—Rodney A. Erickson, Penn State's new chief, described how the university was trying to emerge from the mess.

During a conversation with reporters at the National Press Club here, Mr. Erickson said the university had enrolled some 7,700 freshmen at its University Park campus this fall—a figure that was slightly above its target, with a yield rate consistent with that of recent years.

While some people worried that the conviction of Mr. Sandusky, a former assistant football coach, on 45 counts of molesting children might hurt enrollment, Mr. Erickson said that didn't happen. And if anything, he said, the events seem to have inspired many students to get involved in the local community.

"In my 36 years [at Penn State,] I have never seen a group of students who came in more enthusiastic, more focused, more ready to get to work—nor any less proud to be at Penn State," he said. "This is an exemplary group of young people who want to reach out and help others."

A Record in Giving

Penn State's alumni and supporters have also remained loyal. The university brought in $208-million in private donations last year, its second-highest total ever, with record numbers of donors and gifts, the president said. Even more important, those numbers have held up since July, when the NCAA slapped the university with a $60-million penalty and four-year bowl ban in response to a report slamming top Penn State officials for failing to stop Mr. Sandusky.

While the stain on Penn State's reputation has yet to wear off, that doesn't appear to be affecting corporate partnerships. Last week Jeffrey Immelt, chairman and chief executive of General Electric, presented a $400,000 check to the university and told Mr. Erickson that his company wanted to expand joint-research projects with Penn State professors and to hire more of its graduates.

And Mr. Erickson shook off concerns over possible faculty fallout, saying the university had attracted several key senior faculty members in the past year.

"It's really not an issue," he said. "Most academics have long understood that Penn State is a world-class institution, and it continues to be and it will be in the future."

Despite those positives, Penn State has paid out nearly $20-million in legal fees and other costs associated with the scandal, Mr. Erickson said, with the biggest bills still likely to lie ahead.

The university had hoped to reach settlements with as many of the victims of Mr. Sandusky's crimes as possible by the end of this year, but those negotiations are taking longer than expected, Mr. Erickson said.

"Hopefully that process can move along," he said, and the university can settle "as many of those civil suits as possible in a fair and expeditious manner."