Penn State Closing Campuses But Paying Fired Coach Tens Of Millions

UNIVERSITY PARK, PA — Penn State recently announced that it doesn't have the money to keep open seven of its branch campuses. But the university somehow has the funds to pay its former football coach a reported $49 million not to coach.

James Franklin was fired on Sunday after coaching the team to a disappointing 3-3 record thus far this year after being considered a national championship contender at the start of the season. He was in his 12th season with the team.

According to CBS Sports, Franklin's current contract with Penn State pays him $8 million annually

through the 2031 season -- plus a $500,000 retention bonus paid on December 31 each season and various other performance bonuses. His buyout is the full remaining amount on his contract, not including the retention bonus.

“I’m not going to get into the financials. What I will tell you about the buyout… This is an athletics issue, this is not the institution’s issue,” Kraft said. “We in athletics are covering all the costs.”

He would not detail how those costs will covered.

Citing cost concerns and declining enrollment, Penn State in May announced plans to shutter its
Dubois, Fayette, Mont Alto, New Kensington, Shenango, Wilkes-Barre and York campuses. They are among the dozen of the 20 branch campuses that initially were studied for closure along with Beaver, Greater Allegheny, Hazleton, Schuykill and Scranton.

The schools will close after the 2026-27 spring semester.

According to the university website, funding for all branch campuses will drop a total of $15 million in the 2026-27 fiscal year. That cut comes amid an ongoing $700 million renovation of Beaver Stadium, which Penn State officials say will come from athletics money.

Athletics funds presumably will not be used to pay for university president Neeli Bendapudi’s significant salary increase, which was approved last month by the board of trustees.

Her base annual salary will jump from $950,000 to $1.4 million. Her pension will rise from $250,000 to $525,000. Her deferred compensation will jump from $550,000 to $650,000.

Bendapudi will receive an automatic 3.5 percent salary increase each year of her contract, which runs through 2032.

Penn State tuition is increasing for the 2026-27 academic year, with a 2 percent increase for in-state undergraduate and graduate students at University Park and a 4 percent increase for out-of-state students at University Park.