The Penn State University Board of Trustees approved an $11.1 billion budget package for the 2027–28 academic year that will raise tuition and housing costs for most students. During the same meeting, trustees voted to award university President Neeli Bendapudi a $210,000 performance and retention bonus.
The decisions, made during a scheduled board meeting at the Pennsylvania College of Technology, have sparked swift backlash from some students and alumni who question the optics of increasing the financial burden on families while heavily rewarding top administration.
Because Penn State operates on a two-year budgeting model, the approved rates lock in costs a year in advance. The tuition hike marks the seventh consecutive year that at least some Penn State students will see an increase in their bills.
Under the newly approved plan:
In-State University Park Undergraduates: Will see a 2.5% increase. Lower-division (freshmen and sophomores) Pennsylvania residents will pay an additional $522 per year, bringing their base tuition to $21,400 per year.
Out-of-State University Park Undergraduates: Face a 4% hike, translating to an additional $891 per semester, pushing annual tuition to $46,356.
Housing and Food: Room and board costs at the main campus will rise by 2.5%, bringing the standard annual cost to $15,896.
Online World Campus: Students will see a 2% tuition increase.
In a move to protect regional enrollment, the board chose not to raise in-state undergraduate tuition at the university’s Commonwealth Campuses for the fifth straight year. Out-of-state students at those campuses will see a modest 1% increase.
According to Sara Thorndike, Penn State’s chief financial officer, the tuition increases are expected to generate roughly $59 million in new revenue. The funds are earmarked to help balance a budget strained by a 1.1% allocation cut to administrative and college units, lower overall enrollment, and $78 million in new spending dedicated to employee salary increases and graduate assistant stipends.
The decision to raise student expenses coincided with the Board of Trustees approving the maximum allowable annual bonus for President Neeli Bendapudi.
The $210,000 payout represents 15% of Bendapudi’s $1.4 million base salary, a performance-based incentive outlined in her contract. Officials reported that her total compensation package for the 2025–26 fiscal year reached $2.8 million.
Board Chair David Kleppinger defended the financial package, citing a need for administrative stability in a volatile higher education market. He noted that Bendapudi is already among the more senior presidents in the Big Ten Conference despite only serving a four-year tenure, pointing to high turnover rates across the country. Supporters also credited Bendapudi with aggressively modernizing operations and taking on a massive $200 million structural deficit she inherited upon taking office—a process that included painful cost-cutting measures, employee buyouts, and the controversial decision to close seven branch campuses.
However, the juxtaposition of rising student fees and executive bonuses drew dissent within the board itself. Alumni-elected trustees Matt McGloin and Jay Paterno cast the lone dissenting votes against the budget package.
On online forums and across social media, the reaction from the Penn State community was largely critical. Students and faculty expressed frustration that everyday operational challenges and rising attendance costs continue to mount while executive compensation remains at a premium.
The budget and presidential compensation packages passed with an overwhelming majority of the board’s support and will take full effect for the 2027–28 academic calendar.
