Editor’s note: The Penn State Board of Trustees voted to approve the University's 2027-28 state funding request, as outlined below, during its meeting on Sept. 18.
UNIVERSITY PARK, Pa. — Following Pennsylvania’s inaugural $10 million investment in the State-Related University Performance Fund in its 2026-27 budget, Penn State is proposing a $60 million performance-based funding pool for 2027-28 — money that would be shared among Penn State, the University of Pittsburgh and Temple University, and used to support Pennsylvania-resident students and families.
Penn State is seeking increased state investment to build on the University’s long-standing role as a critical driver of Pennsylvania’s economy, communities and workforce.
Penn State contributes $15.8 billion to Pennsylvania’s economy each year, supports nearly 110,000 jobs, and generates more than $782 million in state and local tax revenue. More than 400,000 Penn State alumni live and work in the commonwealth, helping to fuel businesses, communities and industries statewide. Penn State’s $1.44 billion research enterprise also drives innovation and discovery in areas critical to Pennsylvania's future, ranging from artificial intelligence to national defense, energy resilience, agriculture and public health.
“Penn State’s partnership with the commonwealth is grounded in a shared commitment to creating opportunity and building a stronger Pennsylvania,” President Neeli Bendapudi said. “Our request for an increase in performance-based funding reflects our dedication to delivering results for Pennsylvanians, and also the need for increased investment in student success, workforce preparation and community impact.”
As Pennsylvania continues to compete nationally for talent, innovation and economic opportunity, Bendapudi said increased state investment in Penn State would strengthen the University’s ability to meet the needs of Pennsylvania students and help the commonwealth attract and retain the talent it needs to thrive. It also would provide resources to address rising operating costs and sustain the University’s contributions to the state’s workforce, economy and communities.
In addition to performance-based funding, the University is requesting a total appropriation of $367 million, including level funding for its general support appropriation — which is used to provide lower in-state tuition for more than 41,000 Pennsylvania-resident undergraduates — as well as funding increases for Penn State Agricultural Research and Extension, Invent Penn State, and Pennsylvania College of Technology.
“Our appropriation request reflects the many ways Penn State serves Pennsylvania — educating the state’s future workforce, advancing research and innovation, strengthening agriculture, and expanding access to quality health care,” Bendapudi added. “By investing in these shared priorities, the commonwealth is investing in its students, communities and future. We look forward to working with the governor and General Assembly to create even greater opportunity and prosperity for all Pennsylvanians.”
Funding allocated to the State-Related University Performance Fund would be shared by Penn State, Pitt and Temple according to a formula based on student outcomes and institutional performance. In 2026-27, Penn State received nearly $4.5 million of the $10 million earmarked for performance-based funding.
Penn State’s 2027-28 appropriation request, which was advanced by the Board of Trustees Committee on Finance and Investment at its Sept. 17 meeting, must still be approved by the full board during its afternoon voting session on Sept. 18. The request includes:
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Performance-Based Funding: $60 million for the State-Related University Performance Fund — a $50 million increase over 2026-27. The funding would be distributed to Penn State, Pitt and Temple under a formula that considers Pennsylvania student enrollment, including full-time undergraduates, Pell Grant recipients and community college transfers, along with measures such as graduation rates, high-demand degree production and affordability.
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General Support: $242.1 million, representing level funding from 2026-27. This funding is used to support Penn State’s in-state tuition rate, benefiting more than 41,000 Pennsylvania-resident undergraduate students, and helps to sustain and grow the quality of the University’s academic programs.
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Agricultural Research and Extension/Land Scrip: $63.7 million, an increase of $6 million over 2026-27. This funding supports Penn State Extension and agricultural research programs serving every Pennsylvania county. If approved, part of this investment would fund technical expertise and ongoing biosecurity education, training and preparedness initiatives that help to safeguard Pennsylvania agriculture against emerging threats. This enhanced funding also would advance agricultural technology; strengthen the state’s forestry, food manufacturing and bio economies; and prepare the next generation of agricultural workers. As these programs are not funded with tuition, additional state support is needed to keep pace with rising costs and leverage matching federal and county funds.
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Pennsylvania College of Technology: $41.2 million, an increase of $5.5 million over 2026-27. A special-mission Penn State affiliate, Penn College uses this funding to expand access to high-demand technical programs that prepare Pennsylvania’s workforce. The college serves 4,820 degree-seeking students, 87% of whom are Pennsylvania residents. The requested increase would support expanded capacity in diesel technology, heavy equipment, and power generation programs.
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Penn State Health and College of Medicine: $17.1 million, representing level funding from 2026-27. This funding supports medical training and helps to deliver high-quality, innovative healthcare, particularly in rural communities.
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Invent Penn State: $3 million, representing an increase of $650,000 over 2026-27. This funding would strengthen and expand the LaunchBox and Innovation Network and increase access to the Pennsylvania Technical Assistance Program for small- and medium-sized enterprises, with an emphasis on the manufacturing sector.
A significant return on investment
Penn State’s $242.1 million general support appropriation helps to offset tuition costs for Pennsylvania residents while supporting the University’s efforts to expand access to higher education and attract talented students regardless of their financial circumstances.
Divided among more than 41,000 in-state undergraduates, the appropriation averages $5,863 per student. Penn State builds on that investment by providing lower in-state tuition that saves the average resident undergraduate $17,651 per year compared to a nonresident student — more than tripling the state’s per-student investment.
Additionally, a 2025 report found that Penn State delivers a substantial economic return to the commonwealth, contributing an estimated $15.8 billion to Pennsylvania’s economy each year. The University’s impact extends across communities throughout the state, supporting jobs, generating tax revenue, and creating opportunities for Pennsylvanians.
Among the report’s findings:
- Penn State supports nearly 110,000 jobs across Pennsylvania.
- Penn State and its alumni account for about one in every 10 jobs in the state.
- More than 400,000 Penn State alumni live and work in Pennsylvania.
- For every $1 the University receives in state appropriations, it generates $25.06 in economic activity and $2.27 in tax revenue for the state.
- Penn State generates more than $782 million in state and local tax revenue annually.
Penn State’s funding falls below the state, national average
The $5,863 in general support funding that Penn State currently receives per in-state undergraduate ranks last among Pennsylvania’s public universities and falls significantly below the national average. Based on fall 2025 data, Temple University receives $11,159 per in-state student, Pennsylvania State System of Higher Education (PASSHE) institutions receive $10,209, and the University of Pittsburgh receives $8,827. Nationally, public universities received an average of $12,082 in state support per full-time student in 2025.
Matching the per-student funding provided to Pennsylvania’s other public universities would require an additional $122 million for Penn State in 2027-28. Because that level of increase would be difficult to achieve, Penn State instead has requested a larger appropriation for the State-Related University Performance Fund.
Next steps
Following the submission of Penn State’s 2027-28 appropriation request, University leaders will spend the next nine months working with the governor and General Assembly to advocate for increased state support. Those conversations will continue through the state’s June 30, 2027, deadline to finalize appropriations and approve a 2027-28 budget.