UNIVERSITY PARK – During its first meeting of the Spring 2024 semester on Jan. 23, the Faculty Senate heard updates from Penn State leadership and engaged in conversation on the future of the University. They discussed the budget, a new business approach for remaining “great at scale,” and the recently announced academic program and portfolio review (APPR).
Updates from University leadership
President Neeli Bendapudi addressed the senate on key points from the major update that was released on Jan. 22 about the University’s operations and future, including investing in people, a sustainable business model, diversity, equity, inclusion and belonging (DEIB), enrollment, academic excellence, research excellence and operational excellence.
The purpose of this communication, Bendapudi said, was to share an update on the administration’s progress since she took office a little more than a year-and-a-half ago and to call on faculty leaders to work together with the administration over the next 18 months to create a more sustainable business model for Penn State.
“We are at a critical juncture for higher education and a particularly critical junction for Penn State,” Bendapudi said. “At the heart of it all, to me, is the question of whether we are evolving to meet the needs of students and society in everything we do, including in our teaching mission, our research mission, service, creative activity and our public impact.”
While the University has made significant progress in closing its budget deficit, Bendapudi said, it is still facing significant challenges, including changing demographics, increased operating costs and stagnant state funding.
In order to reach the goal of achieving a sustainable business model by the 2025-26 budget cycle, the next 18 months will be spent working alongside stakeholders, including Faculty Senate, to develop strategies that make sense for each individual unit and Penn State as a whole. That will include making investments in areas of potential growth within education and research.
This also means making decisions to divest from areas that are not as central to Penn State’s mission, according to Bendapudi, which means reducing the 2025-26 budget by $94 million, including a 14% reduction to the Commonwealth Campuses’ central budget allocation.
Faculty senators raised concerns, particularly regarding the announced budget cuts to the Commonwealth Campuses and asked how decisions will be made. Several senators voiced concerns about not feeling included in the decision-making process.
“We’re an incredibly strong university,” Bendapudi said. “And instead of saying we need to make cuts now, we’re saying we need to work together over the next 18 months. We don’t have all of the answers but we’re trying to get all campuses to work together to figure out how to maintain our mission and make sure each student has a wonderful Penn State experience.”
She mentioned that Margo DelliCarpini, vice president for Commonwealth Campuses and executive chancellor, has been meeting with all chancellors to talk through ideas for how to implement a performance-based funding model that would benefit students and reward campuses for positive metrics such as enrolling more first-generation and low-income students. Relying on subvention funds – which come from student tuition and fees – to keep the campuses afloat is not sustainable, she said.
Bendapudi encouraged everyone to thoroughly read the information that was sent via email and posted on Penn State News, and to use the link at the bottom of her email message to ask questions and share suggestions.
“You have our commitment to answering your questions and to continued dialogue,” Bendapudi said. “We are counting on you. We need to work on this together. We are committed to not just providing updates throughout this process but to thinking of ways we can continue to work together.”
Academic Program and Portfolio Review
Included in the Jan. 22 update was the announcement that the University will begin an academic program and portfolio review (APPR) this semester of all academic programs, including undergraduate and graduate majors and minors offered at all campuses. This effort, which will be done in collaboration with Faculty Senate, is intended to determine how the University’s program offerings align with students’ desires and needs, as well as local, state and national employment trends.
This process will not include professional programs in law and medicine.
“The overarching goal of the academic program and portfolio review is to emerge with a Penn State that remains student-centric with a comprehensive and cohesive academic portfolio that meets our educational mission sustainably and is aligned with our research,” Executive Vice President and Provost Justin Schwartz said. “This is a critical part of the bigger strategy to create a more sustainable and stable University. We know that most of what we do at Penn State starts with academics and we must ensure that we deliver a world-class education that not only excites students but puts them on a pathway to meet their own life goals.”
Schwartz emphasized that this process is in “Phase 0” — rolling out the roadmap and plan for faculty engagement — that there are no predetermined outcomes and that this is not a process to justify decisions that have already been made.
The next step in the timeline is to gather data and stakeholder input throughout the spring semester and to make recommendations by the summer. Faculty Senate will begin its review process by Fall 2024, with implementation set for Fall 2025.
“I’m hoping this timeline strikes a balance between giving us enough time to gather full engagement and input and to make progress and changes that are, in some cases, long overdue in responding to changing trends in society,” Schwartz said.
To guide this large and complex process and make sure it remains on track, Penn State will engage an outside consultant to provide objective support to the internal project team. In addition to Schwartz, that team also will be comprised of DelliCarpini, Faculty Senate Chair Michele Stine, as well as other faculty, staff and students who are still being named.
In response to faculty concerns about the outside consultant's role, Schwartz said the consultant will be gathering information and advising the internal working group and will not be making decisions. The request for proposal (RFP) process is underway to determine who the outside partner will be.
“An outside consultant gives us the benefit of having experts who can objectively look at the higher ed landscape, look at our programs in the context of benchmarking with what our peers and competitors are offering and provide a lot of the heavy legwork to help us develop the framework, including the scope, key deliverables and other metrics that will help us evaluate programs in the future,” Schwartz said.
Schwartz said they are now discussing the portfolio review with key leadership, including deans and chancellors, and also intend to incorporate significant involvement from the colleges and campuses, as well as Faculty Senate, throughout the process.
He reiterated that engagement from faculty, students and staff will be essential throughout the APPR process.
“It's not as simple as saying we want engagement, but I truly believe we need engagement across the University. This is our opportunity to define our future and ensure that we remain at the forefront of delivering the land-grant mission,” Schwartz said. “This is essential to healthy and sustainable outcomes. Additional events and opportunities for engagement, such as discussion sessions, are being planned and mechanisms for submitting confidential input already exist through the question website.”
Questions also arose from faculty regarding the idea of creating an interdisciplinary school, which would offer programs in areas such as artificial intelligence and sustainability, which span across different disciplines. A few faculty members raised concerns about this effort taking away resources from existing interdisciplinary programs.
Schwartz said it is too early to say what the impact could be, but there have been no conversations about moving or making changes to existing programs.
University budget presentation
Addressing questions and concerns from senators, Senior Vice President for Finance and Business Sara Thorndike gave a budget update on how the University performed financially in Fiscal Year 2023 and provided a look ahead at 2024.
The University had a $57 million deficit in 2023, which was $89 million better than expected. That included $79 million more in revenue, which came primarily from investments, F&A and grants income, and $47 million in savings on the expense side, primarily from the strategic hiring freeze and other non-personnel savings.
“We did much better than what we budgeted, which is fantastic and really the work of all of our faculty and staff, in addition to a good investment environment, which we’re grateful for,” said Thorndike.
The primary sources of income for the Educational and General budget are tuition and fees (74.1%), followed by state appropriation (10.8%), F&A and investment income (8.4%) and other (6.7%). These funds are spent mostly on instruction (27.7%) and academic support (21.6%), followed by institutional support (18.2%), student aid (8.8%) and research (7.5%).
Questions from faculty centered on Intercollegiate Athletics’ budget and whether any of that unit’s revenue could be used to supplement the education budget. Faculty referenced the $700 million Beaver Stadium project, which is being financed by debt.
“Auxiliaries, including athletics, are self-supporting and Penn State’s athletic department is one of only a handful in the country that generates enough revenue to cover its expenses,” Thorndike said. “Most of its revenue comes from football, which supports all 31 sports, most of which don’t generate revenue but benefit the University. I am very grateful that athletics’ is self-supporting.”
Graduate Council members voiced concerns about the impact of the new budget model on graduate education. Members’ concerns dealt mostly with incentives and disincentives they see have been created by the new model and an alleged lack of recognition of graduate students’ contributions to the research and teaching missions of the University.
Schwartz said he agreed that a more holistic review of advancing graduate education at Penn State, beyond just looking at the budget model, is needed.
Other business
Senate held a general discussion on what the definition of shared governance is, what it means and what it should look like at Penn State. They made a nonbinding request that the Board of Trustees, president and senate chair form a joint senatorial task force to establish a more concrete definition and standards.
The senate also:
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Listened to a presentation about the Penn State IFC/Panhellenic Dance Marathon (THON) from Executive Director William Vincent. THON has raised more than $219 million since 1977 for the Four Diamonds Foundation to fight pediatric cancer and support patient families. This year’s event will take place Feb. 16-18 at the Bryce Jordan Center.
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Heard an update on the IT Optimized Service Teams from Chris Lucas, interim vice president for IT and Chief Information Officer, and Tracy Langkilde, Dean for the Eberly College of Science and academic co-lead for the project.
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Was encouraged by Lance Kennedy-Phillips, vice provost for planning and assessment, and David Callejo Perez, associate vice president and senior associate dean for academic programs, to read the University self-study report, which will be publicly shared on the self-study website in February. The self-study is part of the Middle States Commission on Higher Education’s routine accreditation process. Faculty senators were also encouraged to participate in interviews and meetings with the commission during its site visits to select campuses through March 27.
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Passed legislative reports clarifying rules on closed committee meetings and revising the senate policy on Accredited U.S. Institutions (42-82). It also voted to move the vote on changes to the Division I Athletic Competition (67-10) policy to the March plenary meeting.
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Voted to adopt a positional report outlining a Faculty Bill of Rights, with amended language making clear that the report is aspirational and not legally binding. The report, introduced by the Senate Self-Study Special Committee, details 14 rights to guide the cultivation of an inclusive, vibrant and intellectually stimulating academic environment. Most of the rights listed are already codified in existing Penn State policy.
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Heard an informational report on major artificial intelligence initiatives, including the Nittany AI Alliance.