As higher ed groups ask for more coroanvirus aid, $47B is ‘the floor’

Table of Contents

Dive Brief:

  • The American Council on Education (ACE), on behalf of 40 higher ed groups, is lobbying Congress for more funding as it crafts another coronavirus stimulus bill.

  • ACE conservatively estimates the sector will need at least $46.6 billion after losing money on enrollment, auxiliary fees and increased financial aid for students.

  • The request is an effort to help stabilize institutions’ shaky finances. The U.S. Department of Education has already started to distribute the first round of relief funding.

Dive Insight:

ACE initially asked lawmakers for about $50 billion as they created the Coronavirus Aid, Relief and Economic Security (CARES) Act, which ultimately provided about $14 billion in higher education funding. ACE called the allocation for the sector “woefully inadequate.”

The Education Department last week greenlit colleges to collect more than $6 billion of that funding, which will be passed on to students who have been disadvantaged by the coronavirus in the form of emergency grants. The department will distribute another $6 billion or so at a later date for colleges to address their own expenses. A searchable breakdown of how much money each institution is slated to receive is available here

In identical letters sent to the U.S. House of Representatives and the U.S. Senate last week, ACE President Ted Mitchell wrote that higher education faces “enormous and unprecedented challenges” because of the pandemic, and he stressed the industry’s role as a significant economic engine in many jurisdictions. 

Underfunding higher ed affects far more than institutions’ finances, Mitchell wrote, noting that in states such as California, Iowa and Maryland, colleges are the largest employer.

ACE calculated that with potential enrollment drops for the next academic year — particularly among lucrative international students, which the group projected to decline by 25% — institutions collectively would lose $23 billion in revenues. 

They would also take a financial hit of about $11.6 billion, ACE estimated, related to a downturn in income from auxiliary services. These include housing, food services, bookstores and health and recreational facilities, which help support day-to-day operations and academics, Mitchell wrote.

The virus also has ravaged some students’ and families’ finances, leaving less money for postsecondary education, he added. That may require institutions to front $12 billion more in aid, based on a 20% increase in unmet need. In the last several years, institutions have been offering more merit and need-based aid.

The groups proposed that funding in future legislation be split evenly between institutions and students, as the CARES Act required. 

In its calculation, ACE did not factor reductions in state support or a downturn in donations, both of which are likely.

“Accordingly, the figure of $46.6 billion represents just the floor of the overall impact confronting colleges and students as a result of the pandemic,” Mitchell wrote

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