Penn State branch campuses face large share of $94M in proposed budget cuts

Penn State University branch campuses — their enrollments down sharply — face the largest share of $94 million in universitywide spending cuts intended to erase an operating deficit and create what President Neeli Bendapudi calls “a more sustainable future.”

The 20 campuses, including those in Western Pennsylvania, would absorb a $54 million or 14.1% reduction under a proposal being readied for a July vote by university trustees. It covers fiscal year 2025-26 and was outlined by university leaders this week.

The locations in Western Pennsylvania include Penn State New Kensington in Upper Burrell, Penn State Greater Allegheny, on the border of McKeesport and White Oak, Penn State Beaver and Penn State Fayette, the Eberly campus, as well as Penn State Shenango.

Penn State intends to reduce by $29 million or 3.8% the total appropriation for central administrative and student support and cut by $11 million or 1.4% spending for academic colleges at University Park, compared to the 2024-25 allocation levels.

Michele Stine, chair of Penn State’s Faculty Senate, said she and her colleagues are dismayed and worried.

“There’s a broad sense that decisions are being made with little input or consultation from the people most affected by those decisions,” Stine said. ” Because much of the budget, particularly at the Commonwealth Campuses, is tied to salaries, it is hard to see how these cuts would not impact jobs and programs.

“We are worried about the impact such cuts will have on students and on the communities served by those campuses.”

The new round of cuts comes as enrollment and financial pressures in higher education nationally have spread from small private and regional public campuses to elite universities that are flagship institutions within their states.

At West Virginia University, a furor erupted last summer and fall over program and personnel cuts proposed by President E. Gordon Gee, including elimination of the world languages department. In recent weeks, cost-cutting at the University of Connecticut and the University of New Hampshire also have sparked controversy.

Bendapudi took office in May 2022. She said that Penn State is positioned for success and noted strong enrollment demand on its main campus, but she also said the university faces headwinds.

Expenses have outpaced revenue for some time, not only because of double-digit enrollment losses on what Penn State calls its Commonwealth campuses, but also student demographic changes, waning interest in some main campus departments and “stagnant state funding that isn’t even keeping up with inflation,” Bendapudi said.

In June, TribLive reported that the branches statewide had lost 30% of enrollment since 2010, with individual campuses seeing declines topping 60% that reduced enrollment to a few hundred students.

“These are not one time challenges or situations that are going to go away. These complexities require a new way of thinking to maintain our long-standing commitment to greatness at scale,” Bendapudi said in a video message to campus this week. “This is why we must take a hard look at our programs, our portfolio – in fact, frankly – our entire business model for higher education.”

It was part of a text and video statement titled, a road map for the university’s future, which also promised strategic investments to capitalize on university strengths. The university also announced a $60 million investment in staff salaries.

Bendapudi and top aides have expressed commitment to maintaining all branch campuses. On Thursday, spokesman Wyatt Dubois reiterated their importance but did not say if that means all would remain in their current form.

“Each campus brings a unique element and value to the Penn State community and to the university’s structure,” Dubois said. “However, many of the Commonwealth Campuses have experienced significant enrollment declines in the last many years and are spending more than they are able to generate through tuition. This is not a sustainable business model for the university.”

Penn State “is exploring many avenues to consider the best infrastructure and vision for its footprint and student offerings.” he added.

Last year, Penn State adopted a two-year budgeting cycle to better plan for operating costs and revenue needs. It faced a projected $140 million deficit in its $3 billion education and general fund budget for the fiscal year that ended in June, but by August, had pared it to $63 million.

The new reductions are not expected to be across the board, but instead based on examining individual programs. Decisions could be 18 months away.

Officials reiterated the benefits of their Commonwealth campuses, which enroll nearly 24,000 of Penn State’s 88,000 students..

“Our Commonwealth Campus structure, which provides affordable, close-to-home access to a Penn State education, is a critical part of our land-grant mission,” said Matt Melvin, vice president for enrollment management.

He said Penn State is considering potential for more out-of-state, international, adult, online and transfer students.

“How we implement change will be fundamentally different across the commonwealth as we are individually analyzing enrollment, total facility costs, our physical infrastructure, our programs, our personnel, and our community engagement,” said Margo DelliCarpini, vice president for Commonwealth Campuses and executive chancellor. “Some of the options we are exploring to offset costs may include what it would look like to partner with additional local community colleges and rent out our facilities for some of their programming.”

In August, officials announced plans to study the feasibility of creating a Butler County Community College location at Penn State Shenango in Sharon, Mercer County