Dive Brief:
- Pennsylvania State University is offering voluntary buyouts to faculty and staff at its 20 commonwealth campuses as it looks to “attain a sustainable financial operating model” for those locations, the institution said in a release Wednesday.
- Eligible employees can elect to retire early or leave their jobs through the program through May 31. The buyouts include 12 months of the employees’ base salary and six months of subsidized health insurance for six months. A spokesperson for the university said by email that it does not have a target for participation in the buyouts.
- Penn State President Neeli Bendapudi said in a statement that the buyouts allow the university to “make progress toward our organizational goals while also demonstrating the highest degree of respect and support for our employees who choose to partake in this program.”
Dive Insight:
Penn State started the year by announcing plans to cut nearly $100 million dollars from its fiscal 2026 budget. It came after the university ran a nearly $91 million deficit in fiscal 2022. The university also projects deficits in the tens of millions for coming years, including an estimated $44.5 million deficit for fiscal 2024, according to the university’s latest budget presentation.
“These are not one-time challenges or situations that are going to go away,” Bendapudi said in a January video. “This is why we must take a hard look at our programs, our portfolio, infrastructure, operations — frankly, the entire business model for higher education.”
The newly announced buyouts are meant to cut staffing costs, as part of Penn State’s broader effort to close its budget gap. The university noted it developed the program with input from its campus chancellors.
At the moment, Penn State has no plans to offer buyouts at its University Park campus, medical college or law schools, the institution said. But it added that the “decision may be reevaluated based on future needs.”
Anticipating questions about potential layoffs, a university FAQ said future budget-cutting moves depend in part on participation in the buyout program.
It also noted that “involuntary layoffs and non-reappointments could occur in the future and could include people who are eligible for this Program.”
Penn State cited falling student enrollment — with total students across the system declining nearly 4% to 87,903 between 2019 and 2023 — combined with flat levels of faculty and high operating costs in explaining the need for the program.
The university last offered voluntary retirement packages in 2016. And in 2014, it made broader buyout offers to eight campuses in western Pennsylvania, as well as its agriculture college and one of law schools.