Penn State Faces $124M Shortfall, Plans Cuts

Penn State faces a projected $124 million shortfall in its $2.2 billion core budget, driven by an estimated $87 million loss in tuition revenue as enrollment fell and about $37 million in higher-than-budgeted employee health insurance costs. The university plans targeted spending cuts averaging about 1.25% across budget units, using non-personnel reductions, while keeping previously approved tuition rates unchanged. Overall enrollment declined by roughly 3,000 students, with about half the drop at Commonwealth Campuses scheduled to close; international, out-of-state and graduate enrollment also fell. In contrast, University Park set records for undergraduate enrollment and its incoming first-year class. Officials cite broader higher-education trends, including a shrinking pool of college-bound high school graduates, while saying the university’s enrollment position remains strong.