Penn unveiled its operating budget for fiscal year 2027 last week, projecting continued revenue growth while warning that federal policy changes could pose significant challenges to University finances.

The budget forecasts $19.5 billion in revenue and other support against $18.8 billion in expenses. According to the document, the plan was developed amid uncertainty surrounding federal research funding, international student visa policies, changes to student loan programs, and a forthcoming increase in the federal excise tax on endowment investment income.

In a statement to The Daily Pennsylvanian, a spokesperson for the Office of Budget Planning & Analysis wrote that the budget “reflects Penn’s focus on its mission during a period of significant uncertainty for higher education.” They added that the document contains “difficult tradeoffs to ensure continued investment in Penn’s teaching and research mission.”

“Even as the landscape for higher education remains challenging, this budget reflects confidence in Penn’s direction and a commitment to academic excellence, disciplined financial stewardship, and sustained strategic investment in the University’s future,” the spokesperson wrote.

According to Vice President for Budget Planning & Analysis Trevor Lewis, the budget is “informed by” Penn Forward, the University’s strategic planning initiative launched in September 2025.

The budget follows a series of cost-cutting measures implemented across the University over the last year. In March 2025, Penn instructed schools and administrative centers to defer certain capital projects, freeze staff hiring, and reduce non-compensation spending. According to the budget, units were later asked to model additional reductions to unrestricted expenditures as administrators evaluated the potential effects of federal policy changes.

In January, Provost John Jackson Jr. and Executive Vice President Mark Dingfield outlined a 4% reduction to certain expenditures across all schools and centers. The budget reductions, they later confirmed, may include staffing changes or modifications to programs and services.

Several schools incorporated those reductions into their FY27 budgets.

The School of Arts and Sciences budget includes at least a 4% reduction in General Purpose Fund spending and a 15% reduction in Ph.D. admissions targets. It also reflects the continued impact of deferred faculty searches.

In February 2025, the University instructed several schools to cut graduate admissions rates — including, in some cases, after programs had already accepted students.

The School of Engineering and Applied Science’s budget similarly references the 4% reduction in General Purpose Fund expenditures and a “strategic reduction in staff positions.”

During FY26, the School of Social Policy & Practice reported a net reduction of 3.33 school-funded staff positions and a 5% reduction in part-time lecturer positions. The document added that SP2 operated under a “constrained financial environment” that is “consistent with the School’s focus on preserving financial flexibility.”

In October 2025, SP2 reduced its staff by 8%, citing budget constraints. Earlier this month, Penn’s Graduate School of Education laid off several staff members as part of a University-wide effort to cut costs.

In a statement to the DP at the time, a GSE spokesperson described the layoffs as a “multi-year effort” coordinated by the school and “informed by extensive planning.”

“GSE is actively engaged in cost-control measures consistent with the University’s expenditure reduction initiative,” the budget read.

Despite concern about the future of federal support for higher education outlined in the document, the budget projects continued growth in several major revenue categories.

Net tuition and fee revenue is expected to increase by $51 million, reaching nearly $1.53 billion. Total sponsored program revenue is projected to reach approximately $1.41 billion, while investment income is expected to surpass $1 billion for a second consecutive year.

In March, Penn’s Board of Trustees voted to approve a 3.9% increase in undergraduate tuition costs for the coming academic year, along with allotting a record $347 million to the undergraduate financial aid budget.

The document attributes part of the growth in sponsored research revenue to the Commonwealth-funded Veterinary Diagnostic Laboratory project at New Bolton Center. At the same time, the budget identifies Penn’s research enterprise as one of the areas most vulnerable to federal actions.

Lewis wrote that risks to research funding were among the “most consequential pressures” shaping development of the FY27 budget.

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.

The budget also projects Penn Medicine will remain a major driver of the University’s financial performance. The University of Pennsylvania Health System is expected to generate $14.4 billion in revenue and support during FY27 and transfer approximately $222 million to the academic side of the University. According to the budget, those transfers include additional funding designated for faculty recruitment.

The document also highlights several major projects scheduled for completion during FY27 — including the final phase of the Quad renovations, the opening of the Platt Student Performing Arts Center, and the completion of the Gail P. Riepe Center for Advanced Veterinary Education at New Bolton Center.

It also states that the Wharton School is prioritizing planning for the relocation of its San Francisco operations to “The Cube,” a new office space intended to provide a “dedicated, purpose-built environment” and support “expanded collaboration” across the school and University. 

“Even in this environment, we submit this budget with confidence in its alignment with Penn’s highest priorities and in our collective commitment to academic excellence, disciplined financial stewardship, and sustained strategic investment in the University’s future,” Lewis wrote.

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