HARRISBURG, Pa. — In her testimony before the Pennsylvania House Appropriations Committee on Thursday, Feb. 20, Penn State President Neeli Bendapudi reinforced the vital role that state funding plays in furthering the success of Penn State students, driving economic development, and maintaining affordable access to a world-class higher education experience for residents across the commonwealth.
Funding for Penn State impacts the lives of Pennsylvanians statewide, who benefit from the University’s discounted in-state tuition rate; the science-backed services and knowledge offered by Penn State Agricultural Research and Extension; and the top-quality care provided by Penn State Health, Bendapudi said.
However, with the last increase in Penn State’s General Support funding coming six years ago, Bendapudi said increased investment from the state is needed for the University to continue to attract the state’s top students, offer innovative academic programs, and prepare the state’s workforce of tomorrow.
In particular, Bendapudi noted the significant funding disparity that exists between Penn State and Pennsylvania’s other public universities. Penn State’s funding is the lowest among Pennsylvania's public universities at approximately $5,789 per Pennsylvania-resident undergraduate — which is between $3,700 and $4,700 less per in-state student than the funding received by the University of Pittsburgh, Temple University, and the universities in the Pennsylvania State System of Higher Education.
“For Penn State, right now, when you look at the per-student funding in our base appropriation, for us to be brought up to our peers, we would need an additional $156 million,” Bendapudi said.
In pursuit of that goal, Penn State has requested a $30 million increase in its General Support appropriation as an incremental step to close the funding gap. Bendapudi said she looks forward to continuing conversations with leaders in Harrisburg about closing the per-student funding gap.
A far-ranging discussion
The hearing, part of the commonwealth’s annual budget-setting process, saw lawmakers and the leaders from Pennsylvania’s state-related universities — Penn State, Lincoln and Temple universities, and Pitt — discuss a variety of topics impacting higher education and the state, ranging from performance-based funding, to workforce development, to the future of the University’s Commonwealth Campuses.
A full recording of the hearing is available here.
Below are some of the highlights from President Bendapudi’s testimony.
Performance-based funding
Bendapudi voiced her support for Gov. Josh Shapiro’s proposed $60 million funding increase for the state-related universities, which would be distributed through a performance-based funding model that is currently in development. A newly created Performance-Based Funding Council is working to determine the model’s details, with its recommendation due to the General Assembly and governor by April 30. Bendapudi expressed optimism about the new funding model, which is intended to better align state investment in higher education with the workforce and economic development needs of Pennsylvania, while also incentivizing successful student outcomes.
“Overall, Penn State has been, and I have been, a strong proponent of performance-based funding,” Bendapudi said. “It increases transparency, it increases accountability, and, hopefully, it gives us a chance to participate in our own futures.”
Bendapudi told lawmakers that performance-based funding should be about aligning incentives and making certain that the best interests of the commonwealth and students are reflected in the final set of metrics. Bendapudi stressed the model should be straightforward, and she mentioned several metrics focused on student success that could be included as part of a performance-based funding formula, including enrollment, numbers of first-generation college students and low-income students, graduation and retention rates, and successful outcomes post-graduation.
Penn State already publicly shares many of these metrics as part of its commitment to transparency at psu.edu/accountability.
Workforce development
Bendapudi said that as Pennsylvania’s population continues to age, universities will play a key role in keeping young people in Pennsylvania by preparing them for high-impact, in-demand careers in the commonwealth.
"I truly believe at Penn State, we are an incredible pipeline for the state’s workforce,” Bendapudi said. “In any given year, we educate 50,000 Pennsylvanians, including 42,000 undergraduate students, so we’ve traditionally been the state’s workforce engine.”
She noted that Penn State is undergoing a comprehensive review of its academic offerings through the Academic Portfolio and Program Review to make sure programs are aligned with both student demand and the state’s workforce needs, as well as identify new programs that may be needed.
“For example, we're looking at nurse anesthetists. That's a huge area of growth we are launching, as well as a more applied AI program,” Bendapudi said. “But if you look at the programs that we are developing — whether it's in education, engineering, health — we're asking, ‘What are we offering? Where are the gaps? How do we match up so we're nimble?’ We also are offering more interdisciplinary courses, because that's increasingly needed."
However, Bendapudi emphasized that beyond workforce development, the University is looking to graduate students who are well-educated and well-rounded citizens with the skills needed to succeed in any field.
“One thing that I would say is I'm a firm supporter of the humanities and languages, and so it's not just about the immediate workforce needs,” she said. “We need to be sure we're cultivating the skills that will lead to good livelihoods and good lives.”
Agriculture and rural health
Several lawmakers asked about funding for agricultural research and the University’s impact on rural communities, and Bendapudi said both are part and parcel to Penn State’s land-grant mission. “Food security,” Bendapudi noted, “is national security.”
“The ag funding that you provide is used for both ag research and for extension activity,” Bendapudi told lawmakers. “The extension activity reaches about 11 million people on our website a year, so people come to us for expertise. On the research side, the problems are so relevant to the commonwealth, whether it's the avian flu, whether it's bovine health, whether it's swine flu — all of that work is happening. And, as you know, the Land Scrip money allows us to go out and draw down almost twice as much money from the federal government and other grants, which require state funds.”
Bendapudi also said that rural health was a high-priority initiative that has been embraced by the University.
“Our dean of medicine is trying to work to get more people into primary care and into rural communities,” Bendapudi said. “We’re really looking at how we increase health care availability, with nurses, allied health, mental health and maternal health a priority.”
Invent Penn State
Bendapudi said that the University’s request to renew line-item funding of $2.35 million for Invent Penn State, which was not included in Gov. Shapiro’s initial 2025-26 budget proposal, is critical to the University’s efforts to grow the state’s economy.
“The 21 innovation spaces across the state have led to 8,400 entrepreneurs, 524 Pennsylvania companies, and graduated more than 1,000 startups from Invent Penn State accelerator programs,” Bendapudi said.
Looking ahead
Bendapudi said Penn State and its students continue to thrive — with important metrics like prospective student applications, aggregate enrollment, and four- and six-year graduation rates all on the rise — because of its successful partnership with the state.
As lawmakers prepare to engage in further discussions about the University’s appropriation and the state’s performance-based funding model, Bendapudi reiterated Penn State's commitment to working alongside elected leaders to secure a final appropriation by the beginning of the new fiscal year on July 1.
Learn more about supporting Penn State’s legislative priorities by signing up to become a Penn State Advocate at psu.edu/advocate.