Administration

Penn State moving to regional leadership model for Commonwealth Campuses

Participation in the University’s Voluntary Separation Incentive Program creates opportunity to streamline administrative leadership; Bendapudi commits up to $20M to ease deficit, provide extra time to fully balance the Commonwealth Campus budget

UNIVERSITY PARK, Pa. — With the enrollment period closed for the University’s Voluntary Separation Incentive Program (VSIP), Penn State’s administration is moving forward with its transformation of operations for its Commonwealth Campuses, including a new shared regional administrative model that will create efficiencies across campuses and help reduce expenditures, optimized service teams and a one-time infusion of up to $20 million in additional funding.

Across Penn State’s Commonwealth Campuses, enrollments have declined in aggregate by about 24% over the last 10 years, with all but two campuses experiencing losses of between 16% and 50% over that same period. As the population of college-aged adults continues to decline, colleges and universities across the country are bracing for enrollment challenges to continue. Penn State’s thoughtful approach to these challenges is to avoid more draconian measures seen at other institutions across the country.

“Penn State has been making adjustments to address the reality of changing demographics in Pennsylvania and across the country, but these small changes are not enough to position the University for the long term," said Margo DelliCarpini, vice president for Commonwealth Campuses and executive chancellor. “We have to make fundamental changes that create the most efficient organization possible in delivering on Penn State’s mission.”

DelliCarpini shared additional updates with the community, in a blog post on the University’s road map website this afternoon.

VSIP participation

Due in part to declining enrollments, the overall budget for Penn State’s Commonwealth Campuses has a $49 million aggregate deficit. The University’s Board of Trustees has expressed the desire to see the institution’s overall budget deficit resolved by June 30, 2025. The Commonwealth Campus VSIP was launched as a tool to help reduce that deficit by incentivizing employees to depart Penn State to pursue other opportunities or retire.

In all, 383 employees, or about 21% of those who were eligible across the commonwealth, opted for the VSIP, resulting in an overall 10% reduction in personnel. About 77% of employees participating in the VSIP were staff. The dollar value of salary and fringe expense associated with these 383 employees is $43 million, however, actual savings will not be known until later in the year when University leaders know which positions will be backfilled.

Since the enrollment period closed on May 31, DelliCarpini has been working with campus leadership to determine departure dates for faculty and staff, looking at critical needs to continue delivering an uninterrupted and high-quality academic and student experience on each campus. About 52% of staff participating in the VSIP will be leaving the University on June 28, with the rest having their departure dates deferred until later in the summer or fall, but no later than Dec. 31. Of the faculty who participated in the VSIP, about 76% are leaving June 28, with the remainder having various deferred separation dates based on critical University needs. Faculty and staff participating in the VSIP were notified of their separation date on Monday (June 10).

“We knew we had to lower personnel costs, and the VSIP allowed us to do so in a way that we felt would be as compassionate as possible, putting decisions in employees’ hands while presenting opportunities for the University to transform its operations,” said Tracy Langkilde, interim executive vice president and provost. “We must find ways to be more efficient in using the University’s limited resources while continuing to deliver on our land-grant mission to create new knowledge and lift up students from across the commonwealth and beyond through higher education. The VSIP helped us do that, and it has presented an opportunity to reconfigure our operations across our campuses to make each Penn State campus stronger and more viable.”

University and campus leadership are continuing to evaluate what roles will need to be backfilled as the campuses transform to a regional leadership structure.

Multimillion-dollar commitment to support Commonwealth Campuses

Penn State President Neeli Bendapudi has reiterated that one of the reasons she accepted her role at the University was Penn State’s unique multi-campus structure that is crucial to delivering on its land-grant mission to educate Pennsylvania students. The University is undertaking this transformation of campus operations to set up the Commonwealth Campuses for a long-term and sustainable future.

As DelliCarpini began planning for the Commonwealth Campus transformation — and with feedback from visiting the 20 campuses — she advocated for additional financial support from the president and provost to allow the needed changes to be developed and implemented thoughtfully and effectively. Bendapudi has elected to use up to $20 million of the president’s FY26 strategic funds — about 40% of the total strategic initiatives funds — as an investment in the Commonwealth Campuses. The exact amount of these funds will be clear after the final savings realized from the VSIP are compared against the $49 million budget deficit. This one-time cash infusion of additional funding, which is already accounted for in the overall University budget, will further ease the campuses’ budget deficit and give the University extra time — until June 30, 2026 — to fully balance the Commonwealth Campus budget.

“I believe in the role the Penn State Commonwealth Campuses play in the University’s commitment to Pennsylvania families and in each one of their local communities,” Bendapudi said. “With these funds, campus and University leadership will have more time to find opportunities for growth and areas for improved efficiency.”

Regional leadership structure

With several chancellors retiring, leaving the University for other positions or having opted in to the VSIP, Penn State has the opportunity to streamline its Commonwealth Campus leadership structure to reduce administrative overhead, leverage regional opportunities and provide enhanced collaboration across locations. This summer, working with campus leadership, DelliCarpini will implement the regional leadership model — specifically focused on the University College. The model will prioritize a robust Penn State experience for students and provide consistent administrative and support services that make the University’s teaching, research and service mission possible.

Effective July 1, several campuses will become part of the regional leadership model, led by a single administration:

  • In the west, Penn State Beaver and Penn State Shenango will be led by Chancellor Carey McDougall.

  • In the southwest, Penn State Fayette, Penn State Greater Allegheny and Penn State New Kensington will be led by Chancellor Megan Nagel. Penn State New Kensington Chancellor Kevin Snider will remain in his position to continue to lead the campus and the transition for the Digital Foundry at New Kensington through his Dec. 31 retirement. The interim chancellor/chief academic officer at Fayette will work through the end of his term with Nagel to facilitate the transition in this region.

  • In the northeast, Penn State Hazleton, Penn State Scranton and Penn State Wilkes-Barre will be led by Chancellor Elizabeth Wright. Wilkes-Barre Chancellor Lynda Goldstein will remain in her position through the end of her contract in 2025 to work with Wright and the director of academic affairs at Scranton to facilitate the transition in this region.

  • In the southeast, Penn State Brandywine, Penn State Mont Alto and Penn State York will be led by Chancellor Marilyn Wells.

“Over time we will refine the campus leadership structure as needs evolve to support a streamlined and responsive educational experience for students across our campuses,” DelliCarpini said. “It’s important to note that our campuses will maintain their individual identities. Each one has strengths, and our goal is to build on those and scale them across the commonwealth.”

Grouping campus administrations together geographically will enable further collaboration and resource sharing while continuing to offer students full academic and support services. There are several campuses not currently included in this effort, however, there will be continued means of collaboration. The University will continue to analyze key administrative functions across the Commonwealth Campuses to identify campus structure transformation opportunities.

Optimized Service Teams

To create further efficiencies for the Commonwealth Campuses, the University is accelerating the timeline for staff and technology services at the campuses in facilities, information technology and finance to join Optimized Service Teams (OSTs). Effective July 1, personnel and salaries in these positions will move to the central offices of Physical Plant, Penn State IT, and Budget and Finance. The goal of the OSTs — in alignment with Penn State’s mission, strategic priorities and the roadmap released by University leadership — is to optimize business practices, enhance service and support for the University community, and create career pathways and development opportunities for employees. They also will bring considerable savings to the campuses.

At present, each campus is fully responsible for the salaries and fringe paid to employees in these positions. By centralizing these employees into the OSTs, the positions become part of the general overhead budget, which will result in further savings for the Commonwealth Campuses.

“As we move forward with this much-needed structural transformation, it is important to understand that we will not simply be redistributing work across our employees who have chosen to stay at Penn State and leave everything unchanged except for the numbers of staff that we have,” Langkilde said. “Rather, the reduction in personnel as a result of the VSIP will allow us to change in a way that is regional, shared, collaborative, responsive and data informed.”

Fall 2024 and beyond

Beginning this summer and continuing throughout the transformation process, campus and regional leadership teams will engage campus and regional Faculty Senate teams, program faculty, students, and other key stakeholders to develop recommendations for the academic mission of the campuses based on the planned transformation. Plans also are in the works to engage with state and local governments to develop economic and workforce development hubs and to launch rural health hubs with the College of Medicine.

The University is committed to a thriving Commonwealth Campus ecosystem.

Last Updated June 13, 2024