Building Resources for Our Future
Penn State is committed to developing a sustainable business model to meet the financial challenges of today, while making necessary investments for a bright future centered around student success; innovation; access and affordability; and teaching, research and service excellence.
For generations, and thanks to the tireless efforts of so many faculty, staff and students, Penn State has been a destination for Pennsylvania citizens who want a pathway to an affordable, world-class degree. Penn State’s sustainable business model and budgeting approach are intended to bolster our longstanding public impact and research mission, and help Penn State continue to meet the needs of students and society through teaching, research and service long into the future.
Our budgeting approach aspires to create a stronger Penn State with the financial means and agility to invest in areas that align with University priorities — such as student success; academic and research excellence; and diversity, equity, inclusion and belonging — while also keeping student costs as low as possible and investing in our world-class faculty.
Challenges and opportunities facing Penn State
Like many institutions of higher education, Penn State is confronting financial challenges, including stagnant state funding that has not kept up with inflation; inflationary cost increases for goods and services necessary to its mission; and changing demographics in Pennsylvania.
Despite these challenges, Penn State has resolved its budget deficit starting with the fiscal year 2025-26 budget through the hard work and dedication of so many Penn Staters, and University leaders are committed to making impactful strategic investments for the future growth and success of the institution and its students. Focus areas include bolstering the research enterprise; making strong, successful programs even stronger; investing in new programs to increase overall enrollment and student demand; and investing in the academic, co-curricular and support needs of our students.
Budgeting for a stronger Penn State
In July 2023, the University implemented a two-year, data-driven budget allocation model as part of a comprehensive approach to modernize Penn State’s budgeting approach. As the model now enters its third year, it is helping to inform where the University needs to invest to better align spending with student interest and demand, while also supporting efforts to strategically reduce spending, more effectively allocate financial resources in support of institutional priorities, and continue to operate under a balanced budget.
As Penn State develops its 2026-27 budget, University leadership is committed to collaboration and working closely with deans, chancellors, the Faculty Senate, University Staff Advisory Council and other campus leaders throughout the process to help the University reach and maintain a strong and sustainable position. Penn State leaders have shared the University’s 2026-27 budget allocations with the community, as well as the 2026-27 budget model itself as part of their commitment to openness and transparency in the budgeting process.
Full details about 2026-27 budget allocations, including a comprehensive list of FAQs, can be found on the University’s budget website and on Penn State News.
Enrollment
The higher education enrollment landscape continues to be turbulent, with demographic shifts, rising costs and a growing number of alternative educational providers resulting in increased market pressure. These challenges are not unique to Penn State. As the population of college-aged adults continues to decline, colleges and universities across the country are bracing for enrollment challenges to continue. Penn State holds an enviable position in the market, but efforts to secure and solidify its position must continue for the University to achieve its preferred enrollment future.
Penn State remains one of the largest public universities in the United States, with 87,995 students enrolled across its campuses in fall 2024. The University welcomed its second-largest-ever incoming class at University Park in fall 2024, with more than 9,000 first-year students.
University leaders have discussed the fact that the way we look at our campuses must evolve, however. The new approach will solidify a robust Penn State experience for students and provide consistent administrative and support services that make the University’s teaching, research and service mission possible.
Frequently Asked Questions
What are the FY 2026-27 budget allocations for University Park colleges and administrative units, and for the Commonwealth Campuses?
Links to the FY 2026-27 budget allocations and frequently asked questions are available on the University’s budget website.
Will the University again be sharing the budget model workbooks for FY 2026-27 to show the numbers that were used to determine each unit’s budget allocation?
Yes, Penn State is again sharing the budget model with the community as part of its commitment to transparency in the budgeting process. The budget model spreadsheet for FY 2026-27 is available on the University’s budget website.
What are the net savings of Voluntary Separation Incentive Program (VSIP) and are those savings already reflected in the budget allocations for each campus?
VSIP savings currently total $36.6 million a year and can be used by campuses to help achieve their FY 2026-27 budget reductions.
If I start at a particular Commonwealth Campus, will I be able to finish at the same campus?
Every student who comes to Penn State and completes the requirements will be able graduate with a Penn State degree. Beyond our meaningful commitment to the success of each of our students, we also are a Middle States Commission on Higher Education-accredited university, and we will abide by those accreditation requirements related to teaching and degree completion across Penn State.
Are there plans for layoffs or non-renewals of contracts?
As we develop new organizational structures, we will evaluate employee levels needed to provide appropriate and consistent services across locations. Layoffs are always a last resort and any necessary reductions in personnel will first be addressed, to the greatest extent possible, through attrition. Contract renewals of non-tenure line faculty will be evaluated on our regular timeline, providing robust notice of any non-renewals.
Latest News
Penn State on strong financial path as revamped budget model enters third year
University releases budget allocations, model for fiscal year 2026-27.
Penn State leaders voice support for performance-based funding at campus hearing
Performance-Based Funding Council hears testimony as it works to develop new funding framework for state-related universities