Budget Allocation Approach

Penn State has developed a new data-driven budget allocation model as part of a comprehensive effort to modernize the University’s budgeting approach and to uphold Penn State’s commitment to student success, research, and the land-grant mission across the commonwealth.

How are allocations determined in the new budget model?

To determine a unit’s budget allocation, the model uses activity-based data, including student headcount — which is the number of degree-seeking students enrolled in a college or campus — student credit hours, tuition, and research expenditures, among other factors. Any increases or decreases in a unit’s allocation are based on the various types of data that were input into the model. Student-supporting and administrative units are also funded through the model. In addition, strategic funds are allocated to the president, provost, and vice president for Commonwealth Campuses to supplement allocations, especially for units where the model doesn’t account for complexities or extra costs in those units.

How are a unit's revenues used in the new budget model?

The new model is a tool that will use data to calculate what allocations should be for each unit, and as always, units will use their allocations to determine their own budgets and strategies for their areas. Unit leaders will use the budget allocation model to help inform decisions about strategic investments, personnel, and other priorities for their areas.

How does fundraising impact Penn State's budget challenges?

The allocation model includes revenues from tuition and state appropriations. Other revenues generated by units, like gifts and endowments, are not included in the model.

What will the budget planning process look like in the future?

The budget allocation model is designed to be flexible and is a tool to help Penn State leaders make budget planning decisions. The model will continue to evolve as University leaders work through and analyze data. 

BWG Recommendations from Stakeholder Feedback

Penn State is a large and complex institution providing tremendous value to the Commonwealth community and beyond. The new Budget Allocation model will help the University in long-term planning and prioritizing key priorities such as student success, research, diversity, equity, inclusion, belonging, and more. In alignment with this goal, the Budget Working Group (BWG) has highlighted potential candidates for changes or updates in the budget model as collected through feedback from various stakeholder groups. The group has considered these different elements over the last six months and the below represents the group’s collective responses.

View the 2023 BWG document.

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Penn State’s Institutional Values

Upholding and strengthening Penn State's core mission, vision and values are the foundation of the process to build a new budget model.

University Park bell covered in snow


The working group identified key principles to guide the budget model decision-making process. 

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Frequently Asked Questions

Here you will find answers to the common questions about the budget allocation initiative.

A screenshot from an Asked and Answered Video Series

Asked and Answered

A video series featuring members of the Working Group addressing questions about the budget plan.