Since Penn State announced its multimillion-dollar budget deficit in summer 2022, the university has deeply cut the budgets to its graduate school, engineering college, and two programs for academically advanced students, a Spotlight PA analysis found.
The review offers some insight into the university’s shifting spending priorities as Penn State prepares to announce campus closures. Not all units have faced budget reductions, though. During the same period, the university increased financial support for its nursing college, outreach efforts, and international program, perhaps reflective of President Neeli Bendapudi’s goals that include aligning programs with workforce needs.
In a statement, a Penn State spokesperson said “significant efforts have been underway since the summer of 2022 to reduce the University’s budget deficit and set Penn State up for a successful, sustainable future.”
The university is working to “right-size unit budgets” with the financial model Bendapudi implemented in 2023, the spokesperson said. All initiatives are meant to “more efficiently utilize the University’s limited resources.”
For this story, the newsroom reviewed annual financial data Penn State submitted to the Pennsylvania Department of Education. This information was adjusted for inflation and compared to what the university told the state it expects to spend in the current fiscal year. (See the full analysis here.)
The budget for Penn State’s College of Engineering, at University Park, is expected to drop by 12.4% from fiscal year 2022, according to the analysis. This would be a $20 million decrease if Penn State sticks to the projected budget submitted to the state. The university made cuts to the program even as it graduated more engineering students — 2,542 in the 2023-24 academic year, compared to 2,302 in the 2021-22 academic year, according to the university.
Over the period of Spotlight PA’s analysis, the university increased spending for its arts and architecture college, as well as its school of health and human development. But the largest percentage increase went to nursing — a 26.6% increase. Penn State expects to spend $17.5 million on the program in fiscal year 2025, according to financial records. Last academic year, 135 Penn State students graduated with a nursing degree, down from 180 in the 2021-22 academic year.
Among Penn State’s academic support units, the largest percentage cuts were to the graduate school, Millennium Scholars Program, and Schreyer Honors College.
The graduate school’s budget is down 46.5%, a decrease of $9 million. Graduate enrollment at University Park was 6,281 in fall 2024, compared to 6,330 in fall 2021, according to the university.
On previous Giving Tuesdays, Penn State promoted its Millennium Scholars Program, which provides tuition and housing assistance to students for “an elite opportunity designed to help underrepresented individuals earn a doctorate” in science, technology, engineering, and mathematics, according to Penn State. Since fiscal year 2022, Penn State cut the program’s budget by $3.1 million, a 76.7% decrease.
Over the same period, Penn State cut $3.4 million from Schreyer Honors College, a 54.1% decrease.
Penn State increased its spending on its international programs and outreach activities during this time.
The university’s statewide system is undergoing a massive overhaul. Last year, the university consolidated the leadership of several campuses and gave buyouts to nearly 400 statewide employees, which the university said would cut nearly $43 million from future budgets.
In February, the university announced that up to 12 of its 20 campuses could close, though a recent university statement said Bendapudi wants “a continued presence for Penn State in the Northeast and the Pittsburgh regions of the commonwealth.”
Spotlight PA’s analysis shows the steepest cut to Penn State’s commonwealth campuses was to Behrend, the Erie campus that the university said it will not close.
Since fiscal year 2022, Penn State has cut nearly 17.9% of Behrend’s budget, a drop of $13.6 million. Behrend’s total enrollment is down 18% over the past five years, putting it near the statewide system’s average enrollment decline during that time, according to the university.
The campuses at risk of closure — Beaver, DuBois, Fayette, Greater Allegheny, Hazleton, Mont Alto, New Kensington, Schuylkill, Scranton, Shenango, Wilkes-Barre, and York — all faced meaningful budget reductions in recent years. Hazleton’s budget was reduced by 15.5% (a $2.1 million drop) and Mont Alto’s budget was cut by 14.6% (a $2 million reduction).
A final decision on which locations will be shuttered is expected in May.
