PSU president announces major budget cuts to help alleviate university's financial deficit

University Park, PA (WJAC) — Millions of dollars in funding cuts are in the works at Penn State, according to the university’s president, as work continues on reaching a balanced budget.

Penn State officials say the university continues to spend more than it is earning in revenue.

University president Neeli Bendapudi stressed that they are working to reverse that trend in a budget update message this week.

The reasons for the shortfall range from higher costs and declining enrollment for higher education nationwide, among other reasons.

“Overall enrollment at commonwealth campuses has declined twenty percent since 2016. While some campuses are growing, others have only a few hundred students. At University Park, some of our departments have significant decline in student interest.”

In what she terms a road map for strategic direction at Penn State, the university president also outlined future budget cuts.

“In looking ahead to the 2025-26 budget, the university projects a $29 million reduction for the central administrative units, $11 million reduction for University Park colleges, and a $54 million reduction across the commonwealth campuses.”

Close to 70 percent of Penn State's education and general budget is personnel costs, and the university is spending more than $40 million in salary hikes for faculty and staff.

One campus where enrollment numbers remain steady is University Park.

State College Borough leaders are also keeping a close eye on the impact of Penn State finances.

“In the long term, we have a very solid foundation. We have a great institution that is the living breathing heart of our community. I think that’s going to continue to be so. It’s important that we support everybody experiencing challenges as a result of the changes.”

Penn State is looking to increase the number of first year admission students at University Park from the current 9,175 to 10 thousand students.

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