Penn State’s 2024-25 State Funding Approved by General Assembly

The Pennsylvania General Assembly has passed a state budget that maintains Penn State’s general support appropriation at $242.1 million for the 2024-25 fiscal year, which began July 1. The budget package, which now heads to Gov. Josh Shapiro for his anticipated signature, includes a funding increase of $4 million (13%) for Pennsylvania College of Technology, level funding of $57.7 million for Penn State Agricultural Research and Extension, and restores line-item funding of $2.35 million for Invent Penn State.

Penn State’s general support appropriation last increased five years ago, when the state approved a 2% funding increase for the 2019-20 fiscal year. This funding is applied entirely to Penn State’s education budget and enables the University to offer an in-state tuition discount that benefits approximately 42,000 Pennsylvania resident undergraduates and their families each year.

This year’s funding falls short of the 5% increase that Shapiro had proposed for Pennsylvania’s state-related universities, which includes Penn State.

“The funding we receive from the commonwealth is critical to our public mission to serve Pennsylvania students at our campuses across Pennsylvania,” said Penn State President Neeli Bendapudi. “Our students and families rely on this funding and the significant cost savings it provides through our in-state tuition rate. Thousands more Pennsylvanians benefit from the many programs and services offered through Penn State Extension, Penn State Health, and Invent Penn State that are made possible because of state appropriations.

“As we enter a fifth consecutive year without a funding increase, I look forward to working with the General Assembly and Gov. Shapiro to implement performance-based funding for 2025-26 as a means to increase the state’s investment in public higher education while also meeting shared goals for Pennsylvania’s long-term success.”

Starting in fiscal year 2025-26, Pennsylvania will implement a new process to distribute funding to Penn State, the University of Pittsburgh and Temple University based on a performance-based model. Backed by Penn State, performance-based funding is designed to reward institutions for achieving outcomes-based metrics in support of student success and workforce development, with specific metrics to be determined by a new Performance-based Funding Council before the start of the next fiscal year.

Since 1970, state appropriations, which at one time made up 62% of Penn State’s education budget, have significantly declined to only 10% of Penn State’s education budget. Tuition and fees, now 72% of the University’s education budget, have had to increase to fill the gap over that time. In real dollars, Penn State’s appropriation has been shrinking for years. In 2010-11, the year before the commonwealth implemented significant cuts for higher education, Penn State’s general support appropriation was $304.5 million. If the state’s appropriation had kept pace with inflation in the intervening years, Penn State’s funding would be about $423 million today, or approximately $181 million more than the current $242.1 million the state contributes.

At approximately $5,757 per in-state undergraduate during the last fiscal year, Penn State’s per-student funding ranks last in Pennsylvania, trailing the state’s other public universities by between $3,000 and $3,700 per in-state student. In its 2024-25 appropriation request, Penn State had sought a general support appropriation of $368.1 million to better align the University’s per-student funding with that received by the state’s other public institutions. Bendapudi said that closing the per-student funding gap remains one of Penn State’s top legislative priorities in the years ahead.

Penn State’s complete 2024-25 state appropriation breaks down as follows:

• General Support: $242.1 million, representing level funding from 2023-24. The general support appropriation helps to fund Penn State’s discounted in-state tuition rate that saves the average Pennsylvania-resident undergraduate more than $15,000 annually compared to a nonresident student. These dollars also enable Penn State to invest in the quality of its academic programs so that it can attract the state’s top students and prepare them for successful careers in Pennsylvania.
• Agricultural Research and Extension: $57.7 million, representing level funding from 2023-24. Agricultural research and extension programs are not funded by tuition, so appropriation increases are necessary to keep pace with rising costs and to leverage matching federal and county dollars. This funding supports Penn State Extension and the vital research conducted by Penn State’s College of Agricultural Sciences, benefiting citizens in all 67 Pennsylvania counties and helping the state’s agriculture industry combat challenges ranging from avian influenza to the spotted lanternfly.
• Pennsylvania College of Technology: $34 million, an increase of $4 million (13%) from 2023-24. A Penn State affiliate, Penn College offers hands-on, applied-technology education that is critical to Pennsylvania’s workforce needs.
• Penn State Health and the College of Medicine: Funding was maintained at the same level as the 2023-24 budget. This funding is used for medical assistance to provide access to high-quality health care for Pennsylvanians with limited financial means.
• Invent Penn State: $2.35 million as a co-investment with the University to drive economic development. This funding would be used to strengthen and grow Invent Penn State’s LaunchBox and Innovation Network, and to further expand access to the Pennsylvania Technical Assistance Program for small to medium enterprises, with an emphasis on the manufacturing sector.