Penn to cut school, center budgets by 4% amid federal policy ‘uncertainty’

In response to financial pressure from the federal government, Penn directed its schools and centers to continue cutting costs ahead of budget planning for the upcoming fiscal year.

In the Jan. 29 message, Provost John Jackson Jr. and Executive Vice President Mark Dingfield outlined steps for the University’s updated financial planning — including a 4% reduction to certain expenditures across all schools and centers. The email, which was sent to all University staff, attributed the new efforts to “uncertainty about how evolving federal policy changes might impact” Penn.

“Penn has taken a proactive, deliberate, and collaborative approach to manage its expenses over the past year amid an evolving higher education and policy landscape,” a University spokesperson wrote to The Daily Pennsylvanian. 

According to Jackson and Dingfield, the updates reflect Penn’s plan to defend resources “deliberately and collaboratively against a changing financial landscape.”

“As the impacts of federal policy changes have become clearer and costs continue to rise across the University, we are reaffirming our responsibility for careful financial management,” they wrote. “With this in mind, we have asked Schools and Centers to undertake a proactive planning process for the coming fiscal year that will enable us to thoughtfully manage costs and support our long-term financial outlook.”

Despite the changes, Jackson and Dingfield described Penn’s current financial position as “better”than what they “anticipated a year ago.” 

In February 2025, the National Institutes of Health implemented a 15% cap on indirect costs, threatening to cost the University $240 million in research funding.

A month later, the University instructed several schools to cut graduate admissions rates — including, in some cases, after programs had already accepted students.

The new guidance builds on financial measures first implemented in March 2025, including a hiring freeze and a review of Penn’s capital spending.

In the email, Jackson and Dingfield cited external policy changes — such as those to student loan programs, visa policies, endowment taxes, and research funding — alongside rising legal, insurance, and benefit costs. 

“Taken together, these conditions reinforce our responsibility to continue careful financial management to stabilize our finances for the long term,” they wrote.

The email also requested that Penn’s schools and centers develop plans to reduce specific expenditures by 4% in the coming fiscal year. The planned reductions follow last year’s 5% cut to certain non-compensation expenses. 

They added that Penn’s previous cost-cutting initiatives avoided “the more stringent measures announced by some of our peer institutions.”

Multiple other institutions, including Harvard University and Yale University, implemented initiatives to cut research and administrative expenses last year.  

In an October 2025 interview, Dingfield said that Penn must be “constantly adapting” to the shifting federal policy landscape.

At the time, he noted the importance of mitigating funding uncertainty by gaining “efficiencies in areas that don’t affect students or … faculty.” 

“Penn has navigated many moments of uncertainty throughout its history, and we remain energized by and optimistic about the mission that we continue to advance together,” the email concluded.

---