As Penn State grapples with a budget crisis, it is offering some of its faculty and staff at commonwealth campuses a “voluntary separation incentive program,” in which they can volunteer to leave the university with pay and benefits.

The voluntary separation incentive program, or VSIP, will give eligible full-time faculty, staff and administrators the option to leave Penn State with a lump sum payment equal to 12 months of their base salary, minus any applicable withholdings and deductions, according to a release from the university.

The VSIP will be offered at every commonwealth campus. And while there are many details around what makes an employee “eligible,” generally the eligibility is if someone is an active, full-time employee of the university for at least one year.

There are no current plans to implement it at University Park, the law schools or the College of Medicine, the release states, but that may be reevaluated based on future needs.

Those who decide to participate in the VSIP and voluntarily terminate their employment and comply with the program will also have an option to continue the university’s group health care under COBRA at a subsidized rate.

For employees who are within 36 months of satisfying Penn State’s age or service retirement requirements, there are additional benefits available, the release states.

The VSIP was developed with input from campus chancellors and in the release, the university said it will give campus units the opportunity to save money while providing a financial benefit to the employees who chose to participate.

In a phone interview with the Centre Daily Times, Margo DelliCarpini, vice president for commonwealth campuses, said this is one of a number of “strategic approaches” they’re taking. She said they value their employees and thank them for their commitment to Penn State.

“We are in a challenging budget situation and this is an employee centered strategy that will allow us to make appropriate staffing adjustments to create opportunities, organizational renewal and innovation. And the plan gives eligible faculty the option of taking advantage of a separation package, while providing us greater flexibility to respond to the current budgetary challenges that we have and to really align our resources with priorities,” DelliCarpini said.

There’s not a specific number of employees they’re looking to participate in the VSIP, she said.

Penn State President Neeli Bendapudi, in the release, said due to the challenges higher education is facing, the university needs to evolve in order to continue serving Pennsylvania residents.

“We are currently working to identify every opportunity to strengthen our Commonwealth Campuses and achieve our budgetary objectives. This program allows us to make progress toward our organizational goals while also demonstrating the highest degree of respect and support for our employees who choose to partake in this program,” Bendapudi said. “As always, our teaching, research and service mission to the commonwealth remain at the very core of all decision making.”

DelliCarpini said as an academic institution, they’re here because of the students. They have a commitment to them and their success. She noted the university is a Middle States accredited university and abides by the accreditation requirements that are related to teaching and degree completion across the university.

“We’re working collectively with all of our Commonwealth Campuses and are looking at opportunities for each campus to focus on distinct areas of excellence, align each offering with the needs of students, and reduce expenses,” DelliCarpini said in the release. “While we know this will necessitate changes on our campuses, our commitment to providing a quality education for students from all regions of the Commonwealth remains unwavering.”

Enrollment for the VSIP is open now through May 31. More information about eligibility and the process for participating in the VSIP can be found on the Human Resources website. Those with questions can email VSIP2024@psu.edu.

This isn’t the first time Penn State has initiated this type of program. There was a university-wide program in 2016 for retirement eligible employees, DelliCarpini said, and there was a similar plan in 2014 for eight of the western commonwealth campuses, as well as within the College of Agricultural Sciences, in outreach and Penn State Dickinson law.

Penn State has been facing budget issues for some time. Earlier this year, the university announced plans to make nearly $100 million in cuts for fiscal year 2025-26, which was expected to significantly impact the commonwealth campuses. In a news release, it outlined plans to cut about $94 million from the 2025-26 budget (which runs from July 1, 2025 until June 30, 2026).

The cuts included a $54 million reduction to the commonwealth campuses’ central budget allocation, a $29 million reduction to administrative and student support units and an $11 million reduction to University Park colleges.

However, due to a “spreadsheet error” in the fiscal year 2026 budget, the $54 million reduction in aggregate commonwealth campus budgets has been reduced to approximately $49 million, Sara Thorndike, senior vice president for finance and business/treasurer, said in a release about the university’s 2025-26 budget.