Coronavirus Impact: Financial Losses Hitting Colleges Hard

college education

Colleges and universities across the country are reeling from all aspects of the coronavirus pandemic. Unfortunately, some schools fear being forced to close. In an article published by the AP, schools detail the financial losses from refunding students for housing, dining, and parking. Schools have also lost millions in event and sports ticket sales, which are used to subsidize campus needs. On top of that, millions more have been lost in their endowments and other funds due to stock market swings.

What will be worse, though, if the pandemic hasn’t been slowed enough by fall, campuses will stay closed. Students, new and old, will be unable to return. Schools are putting together plans to bounce back from this spring’s losses, but another lost semester would be crippling. Additionally, little help is on the way from the government.

The $2 trillion federal rescue bill provides $14 billion for higher education. The American Council on Education, an association of college presidents, had requested $50 billion. Ted Mitchell, the group’s president, called the package “woefully inadequate.”

“This crisis is causing massive disruption to students, institutional operations and institutional finances. On some campuses, it is creating an existential threat, potentially resulting in closures.”

Ted Mitchell, President of The American Council on Education

Large and Small Colleges Impacted

Large universities, like the University of California, Berkeley, and the University of Wisconsin, Madison, each expect losses of about $100 million. Bucknell University reports it has lost $150 million from investment losses.

Smaller schools, like Millsaps College in Mississippi, is refunding $1 million in fees, out of their $33 million budget. They’ve faced enrollment issues in recent years, and now worry about attracting future students. Smaller schools run on very lean budgets, and may not be able to recoup these losses.

Benedict College in South Carolina has 2,000 students and a $52 million yearly budget. The strain of refunds has pushed administrators to look at layoffs to stay afloat.

“We have to think clearly about the future of the institution,” said Roslyn Clark Artis, president of Benedict to the AP. “The notion of refunding an amount this significant would cripple the institution, there’s no doubt.”

Even larger schools like Brown and Yale have already instituted hiring freezes.

David Tandberg, vice president of policy research and strategic initiatives at the State Higher Education Executive Officers Association, spoke with the AP. “It’s this major double whammy with multiple hits on the revenue side and new hits on the cost side,” he said. “I’m afraid we’re going to lose some private institutions. I have no idea how many, but many were operating on the margin already.”

The San Francisco Art Institute and MacMurray College in Illinois have already announced their permanent closures. Both have said that while coronavirus wasn’t the direct reason for closing, it was the deciding factor. Both schools are negotiating transfer agreements for current students.

International Losses

Additionally, experts believe the international student population will continue to decrease, especially from China, a historically strong group. At the University of Connecticut, which hosted over 3,000 Chinese student last year, they’re preparing for 25 to 75% fewer international student this fall. Bloomberg reports the shortfall in international student enrollment will cost the worldwide economy billions. Bloomberg also says coronavirus will force universities to face their “addiction to foreign students’ money.”

Many schools report that many incoming high school students have decided to take a gap year this fall. The impact of that loss, an already assumed budget addition, will be significant.

Finally, as with most issues surrounding our country and world right now, the best offense is staying healthy. Keep staying at home. Flatten the curve, so that we can all resume our normal lives!

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