Facing financial pressure and unavoidable budget cuts, Pennsylvania State University is offering its employees voluntary buyouts at its Commonwealth Campuses through May 31.
The Voluntary Separation Incentive Program (VISP), announced last week, financially incentivizes eligible faculty and staff to retire early or leave their jobs and still receive one year of their base salary and six months of subsidized health insurance.
“With the challenges facing all of higher education, our entire institution needs to evolve in order to continue serving the residents of Pennsylvania,” Penn State President Neeli Bendapudi said in a statement. “We are currently working to identify every opportunity to strengthen our Commonwealth Campuses and achieve our budgetary objectives.”
Staff who are eligible for this program include those currently tenured or in line for tenure, academic administrators and staff who are considered full-time and not on fixed-term contracts. Employees also must have been hired before April 1, 2023.
Furthermore, those who participate in VISP will be prohibited from being employed by the university by any means for 36 calendar months from the date of separation.
“This VISP is just one tool of many we are employing to invest in the future of the University and in our employees for the long term,” wrote Margo DelliCarpini, vice president for Commonwealth Campuses.
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Earlier this year, the university announced plans to cut nearly $100 million from its budget starting July 2025 in the hopes it will pave the way for long-term financial stability. Its Commonwealth Campuses are expected to lose more than $54 million in budget cuts, according to the university’s budget office.
“This program is entirely voluntary, and we encourage employees to consult with their support network, a financial consultant and their personal attorney, as appropriate, about participating in the program,” Vice President for Human Resources Jennifer Wilkes said in a statement. “Individuals need to review the opportunities before them and determine if volunteering for the program is right for them.”
By fiscal year 2025-26, the university wishes to have a balanced budget. Whether or not the program will be successful, however, is unclear. According to the university’s website, it employs just over 3,200 folks at its Commonwealth Campuses.
A roadmap of challenges
Earlier this year, Bendapudi laid out a roadmap for the university’s future. Included in that roadmap is a transparent list of the university’s financial challenges it must address in order to achieve a balanced budget by FY 2025-26, including:
- Changing demographics
- A projected $30 million increase in health care expenses in the FY 2025-26 budget
- Sixty-nine percent of the education and general funds budget includes personnel costs
- Stagnant state funding and tuition rates fail to keep up with inflation
- Inflationary cost increases for goods and services necessary for the university’s mission
“The need for change within our University is undeniable and must occur for Penn State to retain its status as a leading institution, to innovate and to invest in greatness at scale in education and research,” Bendapudi said in January. “Our ability to respond to the multitude of challenges and our capacity to adapt is what will determine our success now and in the future.”
