(The Center Square) – It’s budget season, and Pennsylvania legislators are feeling the squeeze of potential cuts from the federal government. So are the state’s leading universities.
Yet, as the system that has made the commonwealth a destination of choice for medical and academic research is transforming, lawmakers maintain a split focus on the state’s higher education.
On one hand, the state is responsible for the Pennsylvania State System of Higher Education, or PASSHE, a network of 14 universities that provide college degrees in every region of the state at the same rate of tuition, which is currently frozen at $7,716 for in-state students.
Then, there are the state-related universities. The four schools include Penn State University, the University of Pittsburgh, Temple University, and Lincoln University. These institutions receive funding directly from the state and offer reduced tuition for in-state students, but they operate independently and have the endowments to prove it.
Penn State currently holds a $4.78 billion endowment, a figure that has more than doubled since 2016. Pitt’s $5.8 billion endowment has grown by 66% in the same span. Temple reported a 10.35% endowment increase in 2024 alone, bringing it to more than $960 million. As of 2023, Lincoln’s endowment was reported at $54 million.
By contrast, West Chester University in the southeastern region of the state is considered among the top PASSHE schools and has a reputation for its strong financial management. Its endowment was reported at $61.1 million in 2023. Slippery Rock University, another PASSHE top performer, is situated just north of Pittsburgh. Slippery Rock reported its endowment at $47.9 million the same year. On the other side of the PASSHE financial spectrum, the much smaller Cheyney University came in at just $1.7 million.
Cheyney and Lincoln represent the state’s only two historically Black colleges and universities. Despite their historic stature, both having been established before the Civil War took place, they demonstrate the wide expanse of financial pictures in both state systems.
The disparities make it difficult to get a comprehensive view of Pennsylvania’s higher education landscape. Nevertheless, they come to the state’s appropriation committees in two groups, PASSHE and state-related, for the annual tug-of-war over additional funding.
Year after year, the same two questions get asked. For the state-related universities, legislators ask why they should invest more money in schools with thriving endowments, largely sourced through investments and massive philanthropic networks. For both groups, legislators ask why schools need more money when enrollment has been consistently sliding downward, largely a product of demographic shifts in the state.
The answers to those questions are especially pressing as federal funds remain in a liminal space, with both legislators and administrators unsure of what will come in and what they can do to make up for proposed cuts.
The Center Square looked at research detailing federal grants allocated to Penn State and Pitt, as well as the private University of Pennsylvania. The numbers demonstrated a behemoth scientific research industry that is deeply reliant on the competitive federal grant system to function.
To accompany the schools’ research arms are huge administrative infrastructures. Those that support compliance with federal regulations are largely funded through overhead costs factored into the grants. Big name researchers, critical innovations in areas like medicine and defense and internationally recognized branding carve out a fundraising landscape that is incomparable to state schools.
The Center Square looked at more than $263 million in research funding received by Penn State, and more than $79 million by Pitt between 2020 and 2025 as identified by data specialist Jennica Pounds. Much of the influx came from the Biden-era Higher Education Emergency Relief Fund, the CHIPS and Science Act and the Inflation Reduction Act, all of which were intended to produce innovation while stimulating a flagging economy.
In 2023, West Chester and Slippery Rock administered just $4.16 million and $1.02 million in federal grants and contracts respectively, numbers far surpassed by their state grants and contracts of $13.5 million and $9.48 million.
New federal caps to overhead costs like the reduction to 15% instituted by the National Institute of Health in February threaten to undermine the larger schools’ ability to support their research, says Penn State’s Senior Vice President for Research, Dr. Andrew Read. He says his university’s large endowment is mostly made up of dedicated funds that they can’t use to meet federal regulatory burdens in research, forcing them to look to other sources.
Dr. J Scott Turner, a retired academic researcher who spent 40 years probing evolution and ecology studies – most recently at the SUNY College of Environmental Science and Forestry – said that the overhead cost cap won’t affect the research that much.
He now serves as director of the Diversity in the Sciences Project for the National Association of Scholars. To him, the bigger problem is that when researchers get that funding, it comes with implicit strings. Political entities like the National Security Agency or the National Institute of Health, which award many grants, naturally have political aims. Those aims, he says, are reflected by which projects are funded in the highly competitive landscape.
He believes the modern competitive grant process has fundamentally shifted science away from discovery and into a position where researchers are constantly focused on justifying and funding their work.
“It’s numbers and papers,” he said. “It’s numbers of the amount of grant monies that you brought in, numbers of students that you have trained, all these kinds of metrics that scientists are now judged by,” he said. “And if you take a real deep dive into the relationship between production and discovery, it’s a very nebulous connection, and so what you have done is you’ve changed basically the landscape of incentives and disincentives that scientists can build careers on.”
While PASSHE tuition has remained frozen, the much better resourced state-related schools have seen their tuition price tags creep up alongside the punishing inflation of recent years. Raising it further to make up for cuts to research funding is not on the table for administrators looking to close the gap created by federal cuts. For state-related schools, the next stop is the state itself.
PASSHE schools, which have recently consolidated six of their universities into just two, have requested a 6.5% increase in state funding in the 2025-2026 budget. Gov. Josh Shapiro has proposed a $60 million increase for the state-related universities and has outlined a specific focus on developing agriculture and life sciences in the commonwealth.
Funding PASSHE is an obligation of the legislature. The state-related universities, on the other hand, have been flat-funded as of late, requiring a two-thirds majority in the legislature to receive increases.
Despite the eyebrow-raising questions surrounding the finances of the nation’s wealthiest schools, education advocates say that the current national conversation around elite research institutions shifts focus at the expense of the vast majority of college students who attend schools like those within the PASSHE system but also all around the country.
Critics say those same institutions should be held more accountable instead of relying on a steady stream of federal grants and student loans.
Alex Shieh criticized Brown University, one of the nation’s eight Ivy League institutions, for raising tuition to more than $90,000 per year while being on track to run a $46 million deficit.
“Where’s all the money going?” Sheih said before a congressional committee on June 4. “I’ll tell you where it’s going; it’s going to an empire of administrative bloat and bureaucracy.”
Operating expenses at schools like Penn State and Pitt also have soared over the past decade.
Shieh said the university employs 3,805 full time non-instructional staff for 7,229 undergraduate students.
“This isn’t education; this is bloat paid for on the backs of families who are mortgaging their futures for a shot at a better life,” Shieh said.
Shieh said budget cuts at Brown led to dorm flooding and “unappetizing” changes to food at Brown’s dining halls while many administrators remained on payroll.
“Across the pond, a world-class education at Oxford or Cambridge can cost about half as much as an Ivy League degree, in part, due to a much lower administrative burden,” he said.
And the mismanagement trickles down to colleges, public and private, big and small. Proposed cuts of 23% to Pell grants and changes to federal student loan programs are poised to reshape the opportunities available to lower and middle class students across the country who rely on federal grants and loans to afford school.
State legislators have emphasized that students from low-income families are opting out of the collegiate path at higher rates than their better resourced counterparts, whose enrollment numbers continue to increase.
During the June 4 hearing on Capitol Hill alongside Shieh, Dr. Julie Margetta Morgan, president of The Century Foundation, stressed that concerns about the nation’s wealthiest schools should be secondary.
“Legislation approved by the House of Representatives pays for tax cuts for the richest Americans by increasing the price of college for low- and middle-income students, including taking away Pell Grants from 1.4 million Americans and reducing them for another 3 million,” said Morgan.
She added, “The deep cuts to Medicaid and SNAP in that bill will also likely increase public school tuition by squeezing state budgets, as higher education will be at the top of the chopping block to cover state budget shortfalls.”
So far, Gov. Josh Shapiro’s budget proposal asks for more than $500 million basic and higher education. Funding for both, as part of a broader strategy to bolster the commonwealth’s workforce, has been a priority in recent years.
Andrew Rice contributed to this report.
