We are writing to follow up on the budget planning process announced in January, which asked Schools and Centers to build on existing cost-containment measures and develop plans to further reduce expenditures. We are grateful for the care, thoughtfulness, and collaboration that went into this work across the University.
We are now moving forward with FY27 budgets based on those reduction plans. All Schools, Centers, and central administrative units will be making reductions as part of a shared effort to meet this moment. While the University continues to see growth in certain revenue streams, federal policy changes and rising institutional expenses—including legal, insurance, and employee benefits expenses—continue to place current and future pressure on our finances. These pressures are compounded by broader challenges, including inflationary growth and global instability.
In the coming months, additional federal policy changes, such as updates to federal student loan programs and an increase in the endowment excise tax, will take effect, while uncertainties around research funding and international student enrollment will continue to play out. In this environment, reductions will enable us to address structural costs deliberately and protect the University’s financial stability for the long term.
These reductions will take shape in a variety of ways within and across Schools, Centers, and central administrative units, reflecting their distinct circumstances and the careful choices that each unit must make. They may include adjustments to staffing levels, consolidation of activities, or changes to programs or services. We will continue working closely with these teams to support their efforts and to understand how the changes are developing across the University.
Careful stewardship during this period will help all of us to advance Penn’s core academic goals and position the University for ongoing resilience. We will navigate these challenges together with transparency and care, recognizing these changes will affect us all, and we thank you for your continued commitment to our shared mission.