After years of flat funding, Penn State gets performance-based boost in PA budget
AI-generated summary reviewed by our newsroom.
- The budget includes more than $4 million in performance-based funding for Penn State.
- The 2026–27 education appropriation for Penn State rises to over $246 million.
- Act 90 of 2024 authorized the model; the council approved the final model in 2025.
After years of flat state funding, Penn State will receive an increase in state education funding through Pennsylvania’s newly implemented performance-based funding model for the upcoming fiscal year’s state budget.
Pennsylvania lawmakers adopted a 2026-27 state budget on Sunday to include more than $4 million in additional funding to the university from a new performance-based funding pool, Penn State wrote in a release. The new model awards state-related universities based on metrics such as graduation rates, student success, affordability and workforce outcomes.
Penn State’s general support appropriation remains at $242.1 million, bringing the university’s total 2026-27 education appropriation to more than $246 million. The performance-based funding model makes for the first increase in state funding since the 2019-20 fiscal year, which saw a 2% increase.
The performance-based pool of $10 million goes toward Pennsylvania’s three state-related universities — Penn State, the University of Pittsburgh and Temple University.
“This initial investment is an important first step that recognizes the essential role higher education plays in strengthening our commonwealth,” Penn State President Neeli Bendapudi wrote in a press release. “The metrics at the heart of this model align closely with Penn State’s mission and values. We are proud to help students from every background earn degrees that prepare them for meaningful lives and careers here in Pennsylvania, while contributing to the economic vitality of communities across the state.”
The amount rewarded is determined by a formula that was adopted last November and measures the universities’ enrollment of Pennsylvania students — including full-time undergraduates, Pell Grant recipients and community college transfers — as well as performance measures such as graduation rates, production of high-demand degrees and affordability, according to the press release.
The funding model also includes an improvement bonus for universities that improve their performance from year to year and those that keep student costs from rising faster than the national rate of higher education inflation.
The state appropriation includes $57.7 million for Penn State Agricultural Research and Extension, $35.67 million for Pennsylvania College of Technology and $2.35 million for Invent Penn State — maintaining the same level of state funding those programs received in 2025-26, the press release states.
Penn State requested a $30 million increase in its general support appropriation for the 2025-26 fiscal year, but lawmakers kept the funding level flat at $242.1 million.
In a release from the university after last year’s budget approval, Penn State wrote that if the university’s funding kept pace with inflation over the past 25 years, its appropriation today would be more than $450 million.
The performance-based funding model was created through Act 90 of 2024, which passed the General Assembly with bipartisan support and was signed into law by Gov. Josh Shapiro in July 2024.
The law did not immediately implement the funding formula. Instead, the Performance-Based Funding Council spent 2024 and 2025 developing recommendations before approving the final model in 2025.
Penn State Vice President for Government and Community Relations Mike Stefan said this is the first step toward more consistent funding increases that keep up with rising costs.
“This new funding is a welcome step that reinforces Penn State’s partnership with the state and the value we deliver to communities across Pennsylvania,” he stated in the release. “However, we will need to continue our broad advocacy efforts due to funding not keeping pace with rising costs.
“It is our hope that this is a first step toward more consistent funding increases in the years to come, which will be critical to our efforts to continue providing a world-class education while keeping costs as low as possible for students and families.”
