UNIVERSITY PARK, Pa (WTAJ) — Penn State President Neeli Bendapudi is concerned about the university’s budget and says swift action is needed to reduce expenses.

In a memo released in February, President Bendapudi pointed at inflation, lower student enrollment and lower state funding as the leading causes of the university’s $140 million budget deficit. Bendapudi said the cuts will be made, including deep cuts in some areas, but the whole university will be affected.

Among the solutions Bendapudi pointed out is a completely new budget model that will help focus on future fund decisions. The new model is a formula-based model designed to be adaptable to help Penn State leaders make budget planning decisions. According to the memo, the model is very similar to other Research 1 universities, however, it will be customized for Penn State.

Also in the memo, which can be read here, Bendapudi said the following.

“While it is an unfortunate reality that to confront our budget deficit and responsibly move forward, and very difficult decisions will be required, it is also true that we can continue to prioritize our mission and preserve our legacy of excellence.”

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Bendapudi made it clear in the memo that at this time, Penn State is not in a financial crisis, and understands that future changes will have significant impacts.