Penn State plans to trim the budgets of many of its colleges and campuses in the 2026 fiscal year, with many colleges and units slated to get 4% or 5% cuts, and the Commonwealth Campuses facing a 14% cut.
Those budget plans were part of a package of information the university shared Monday, giving an overview of the university's fiscal challenges and opportunities and how it will manage them.
Penn State President Neeli Bendapudi pointed to “headwinds” in higher education — including shifting demographics, declining enrollment and changing interests — along with flat state funding.
“And at Penn State we are facing a budget deficit we must overcome," Bendapudi said in a pre-recorded video. "These are not one-time challenges or situations that are going to go away. These complexities require a new way of thinking and working to maintain our longstanding commitment to greatness at scale.”
Expenses are bigger than revenues every year, she said, pointing to several reasons. She said that overall enrollment at the Commonwealth campuses has gone down 20% since 2016. And at University Park, student interest in some programs has declined.
The university, she said, will need to take a hard look at programs, infrastructure and operations — even the business model for higher education.
“We have 18 months, 18 months to figure out how and where we must cut, and how and where we must invest," Bendapudi said.
Bendapudi said that while university budget cuts in the past have been across-the-board, now they will be strategic. She said for 2025-26, the university is looking at making cuts of:
- $29 million for administrative units;
- $11 million at University Park colleges; and
- $54 million across the Commonwealth campuses.
She said the impacts on individual units will vary, and leaders will be working with their individual departments.
And, Bendapudi noted the mission of educating and supporting students.
“How we get there will be measured, intentional and constantly evolving,” she said. “I remain fully committed to our land-grant access mission, so that we can make smart investments across the university and position us to reduce costs for students and families, especially those in need.”
