Editor’s note: The Penn State Board of Trustees voted to approve the University's 2026-27 operating budget and tuition and fees schedules, as outlined below, during its meeting on July 18.
ABINGTON, Pa. — The Penn State Board of Trustees Committee on Finance and Investment today (July 17) advanced a proposed 2026-27 University budget that would continue to hold tuition steady for Pennsylvania resident undergraduates at the Commonwealth Campuses and maintain the University’s balanced Education and General (E&G) budget.
The full board is expected to vote on the final budget and tuition schedules during its Friday afternoon session (July 18) at Penn State Abington. Previously, the operating budget and tuition and fees schedules for 2025-26 were approved by the board last July as part of the University’s two-year budget cycle. The 2026-27 budget will take effect on July 1, 2026, and run through June 30, 2027.
Key components of the proposed 2026-27 budget include:
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No tuition increase for in-state undergraduates at the Commonwealth Campuses: For the fourth straight year, Penn State would freeze tuition for Pennsylvania resident undergraduates attending its 19 undergraduate Commonwealth Campuses. This move would benefit approximately 18,000 students — about 42% of the University’s total in-state undergraduate body — and aligns with Penn State’s goal of maintaining affordability and accessibility.
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Limited tuition increases at University Park and for nonresidents: Also for the fourth year in a row, in-state undergraduate students at the University Park campus would see a 2% tuition increase, which remains below current U.S. inflation rates. Out-of-state undergraduates would again see tuition rise by 1% at the Commonwealth Campuses and by 4% at University Park.
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Graduate assistant stipend increase: Recognizing the critical role graduate assistants play in contributing to the success of undergraduate students, and in advancing research and discovery, the proposed budget includes a 4% boost in the value of graduate assistant stipends for the 2026-27 academic year.
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Employee annual salary increases: At a time when some institutions nationally are facing budget cuts and not able to offer employee compensation increases, the 2026-27 budget once again sets aside a 3% pool for merit-based salary increases for Penn State employees in recognition of their hard work, dedication and value to the University. Employees should note that final individual increases will be based on the performance-review process and may be higher or lower than 3%.
According to Penn State President Neeli Bendapudi, the budget underscores Penn State’s ongoing efforts to balance affordability for students with strategic investments in its people and academic mission — even as the University, like most higher education institutions, continues to face financial uncertainties.
“Throughout our budgeting process, we have remained focused on prioritizing students and their success; supporting the faculty, staff and technical service employees who make Penn State great; and making strategic, data-informed investments that allow Penn State to drive positive impact across Pennsylvania and beyond,” Bendapudi said.
"It is no secret that higher education nationally is navigating a complex and evolving landscape — from shifting demographics and competition affecting enrollments; to uncertainties surrounding international students; to federal funding reductions for research, to name just a few. On top of that, we continue to face flat state funding levels that have not changed since 2019. In the face of these challenges, we are in a stable financial position, and we have developed a flexible and responsive budget model that positions us to adapt as conditions change both here in Pennsylvania and across the country.”
Maintaining a balanced E&G budget
For fiscal year 2026-27, the committee has recommended a proposed University-wide budget of approximately $10.2 billion. This total includes a balanced $2.9 billion E&G budget for a second consecutive year. The E&G budget is primarily funded through tuition and state appropriations and encompasses most of the University’s basic teaching, research and public service programs. In addition to E&G funding, the broader University-wide budget also includes the operations of Penn State Health, Intercollegiate Athletics, Auxiliary and Business Services (including Housing and Food Services), Agricultural Research and Extension, the Applied Research Laboratory, Development and Alumni Relations, Pennsylvania College of Technology, and capital projects across the institution.
E&G budget allocations for fiscal year 2026-27 were shared earlier this year with colleges, campuses and administrative unit leaders, based on the University’s data-informed budget model.
As in previous years, central funds will be provided to advance Penn State’s educational mission, drive student success, and support key strategic priorities for the institution and commonwealth. This includes a total of $40 million in provost-provided subvention — operating subsidies provided to colleges and campuses to address institutional and student needs not fully accounted for in the budget model. Additionally, the model provides $11 million in ongoing annual funding to support specialized instruction and facilities critical to the missions of the Ross and Carol Nese College of Nursing and the College of Arts and Architecture.
Of the $40 million in provost subvention for FY 2026-27, $30 million will support the Commonwealth Campuses, while $10 million will be used to support the academic colleges at University Park.
Included in the overall budget is approximately $73 million to fund the 3% pool for merit-based salary increases, as well as faculty promotions, faculty professional development, negotiated salary increases for union personnel, and funding to cover anticipated increases in health care costs. These costs are expected to be offset by additional tuition revenues of $52 million in the FY 2026-27 budget resulting from the proposed rate increases, with the remainder to be covered by projected enrollment growth and budget redistributions, Thorndike said.
“We are now in the third year of using our revamped budget model, and it is helping us make data-informed decisions about where to invest our resources — especially in areas that align with student interests and growth areas,” Thorndike said. “At the same time, it is helping us identify ways to be more efficient with our spending so we can focus resources on areas strategically important to the University, while also maintaining a balanced budget. We have been able to align this model — which includes needed flexibility — with the president’s strategic priorities, stay true to our land-grant mission, and keep student success at the center of everything we do.”
University outperforms FY 2024-25 budget projections
After initially projecting a $34.1 million deficit in the 2024-25 E&G budget, Thorndike said revenues outperformed the budget by $29 million and expenses are projected to be under budget by $50 million, erasing the projected deficit and resulting in a net surplus of approximately $44.4 million, which will be transferred to the University’s capital reserve to fund deferred maintenance. According to Thorndike, the budget model did not include any funds for capital or deferred maintenance while the University focused on balancing the E&G budget, and this transfer will help to slow the growth of Penn State’s $2.4 billion maintenance backlog.
Thorndike said the University is still working to close the 2024-25 budget and will report final results to the board later this year.
2026-27 tuition and fees
“We understand that paying for college is a substantial investment for our students and families,” Bendapudi said. “That is why for the fourth year in a row, this budget proposes no tuition increase for nearly 18,000 in-state students at our Commonwealth Campuses, helping families to plan without the added stress of rising costs. For all other students, we have made it a priority to keep tuition increases as low as possible, as reflected in the 2% rise for in-state students at University Park that falls below the rate of inflation and is modest when compared to many of our peers nationally, including in the Big Ten.”
The proposed tuition schedules for the 2026-27 academic year include the following rate changes, which are in line with each of the past three years:
Commonwealth Campuses
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No increase for in-state undergraduates.
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1% for out-of-state undergraduates.
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1% for in-state graduate students.
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2% for out-of-state graduate students.
University Park
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2% for in-state undergraduate and graduate students.
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4% for out-of-state undergraduate and graduate students.
World Campus
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1% for all Penn State World Campus students (undergraduate and graduate, regardless of residency).
Penn State Dickinson Law
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2% for all law students (in-state and out-of-state).
College of Medicine
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2% for in-state medical students.
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4% for out-of-state medical students.