Penn State is doing a lot of cost cutting lately.
Under President Neeli Bendapudi, there has been a real campaign to slash what many might see as a bloated budget. The 2023-24 budget is $9.5 billion.
Educating on the scale Penn State does is expensive. In addition to the sprawling flagship University Park campus, there are 20 Commonwealth Campuses spread across the state, including Greater Allegheny, New Kensington and Fayette. The university is the ninth-largest employer in the state, with more than 105,000 jobs. At last measure, it is a $12 billion economic engine.
But it is also at a tipping point. There is the continued reluctance of lawmakers to invest in the university — which exists in a public-private limbo — to the degree other states do their equivalent universities. There is also the high cost of a Penn State education. In state, it’s about $20,000 for tuition alone. Out-of-state students pay almost double that — more than many private schools, which average about $41,000 this year, according to College Board.
Bendapudi has put a lot of financial dieting on the Penn State table, and there is doubtless a lot of belt-tightening that can be done. Some could be through attrition and some by consolidation. Some could be through thoughtful consideration of direction and prioritization of need. There are $94 million in cuts proposed for next fiscal year, with more than half coming from Commonwealth Campuses.
In 2023, a university statement said layoffs weren’t taken lightly but Bendapudi inherited a university with a $140 million general fund deficit. According to Spotlight PA, the president sent an internal memo that pointed to a “vulnerable state.”
So given the financial position and the strict hand Bendapudi is keeping on the purse strings, it seems somewhat hypocritical to see trustees entice her to stay with a big pile of cash. If she stays through 2032, she will get a bonus of $1.5 million.
That is on top of her salary package, in place since joining the university in 2022. This year, her pay is $950,000. She can get an annual increase of $350,000 to $555,000 in her Supplemental Retirement Package. She already had a $1.25 million incentive if she stayed at Penn State through 2027.
It’s a sweet contract if you can get it. And Bendapudi’s actions have made real progress on that deficit, so it’s unsurprising the trustees would want to keep working in that direction.
But when the administration is asking other departments to prepare for deep cuts, it’s hard to see this bonus as anything other than out of touch.
