Penn announced its operating budget for fiscal year 2026 last week, providing plans for the University’s 12 schools, as well as the University of Pennsylvania Health System.
The budget forecasts $17.7 billion and $18.1 billion in expenses and revenue for the University, respectively. The budget — which was approved on June 13 — comes amid political turmoil under the Trump administration, which has continued to threaten federal funding and the immigration status of international students at Penn.
In addition to “proactive measures” taken by the University in response to federal funding uncertainty earlier this year — which included a staff hiring freeze, a review of capital spending for new buildings, and a 5% reduction in non-compensation expenses — the announcement outlines several other alterations made to the fiscal year 2026 budget.
According to the budget, “Penn’s Schools and Centers and central administration are actively engaged in scenario planning to model the impact of potential increases in net investment income excise tax rates, additional cuts in research funding, including a reduction in the federal F&A rate, changes to federal loan policies, and lower international student enrollment.”
The School of Arts and Sciences will continue to operate in line with existing measures from March — it has already reduced graduate admissions by one-third for the 2025-26 school year and is “focused on examining commitments to Centers that are subsidized by General Purpose Funds.”
Similarly, the Stuart Weitzman School of Design has budgeted a “25% decrease in research revenue” as a result of federal funding uncertainty.
The termination of six of eight of Penn Museum’s federal grants has also caused a “major decline” in sponsored revenue. The museum hopes that the decrease in federal funding will be “partially offset” by an increase in grants or fees for service from North American tribes seeking assistance with federal recognition by Penn Cultural Heritage Center.
In March, the Penn Museum began assessing the state of its funding after an executive order called for the elimination of the Institute of Museum and Library Services, which awarded Penn over $1 million in fiscal year 2024.
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The plan notes that Penn’s “total academic budget revenue is projected to decrease by 7.2% or $378 million versus the FY2025 forecast.”
More specifically, the budget is expected to drop by 39.8% — or $390 million — in “other income” due to lower mRNA licensing revenues. A 6% — $85 million — drop in “total sponsored program revenues” is also attributed to the loss of federal funding and the “potential for additional reductions.”
Despite concerns over federal funding, the budget forecasts increased revenue in most major categories.
Penn’s Business Services Division has several investments planned for the fiscal year of 2026, including “the third and final phase of the Quad project, the 1920 Dining Commons renovation, and upgrades to the Hilton Inn at Penn and Sheraton hotels and campus parking garages.”
Penn’s additional expenditures include the University’s Facilities and Real Estate Services investments in Pennovation Works and utilities infrastructure, along with continued work by Penn’s Information and Computing Systems on the Chestnut Street Communications Duct Bank.
According to the budget, the percentage of Penn’s undergraduate aid funded by its endowment income is notably less than that of several of its peer institutions. In fiscal year 2026, endowment income will fund about $89 million, or 27%, of undergraduate financial aid. Over the past decade, Penn’s undergraduate financial aid endowment has doubled to $1.6 billion, according to the plan.
The total cost of undergraduate attendance has increased to $95,667 per year, according to the budget, while the average amount of aid has grown to $74,068. This increase in aid follows Penn’s financial aid commitment from last year to guarantee full tuition scholarships to students whose families make $200,000 or less in a year.
The budget plan comes after Penn released its economic impact report for fiscal year 2024, which highlighted the University’s contribution of $37 billion to the economies of Philadelphia, the city’s surrounding counties, and the state of Pennsylvania.
