Dive Brief:

  • Almost three quarters of college and university presidents believe staff layoffs will be necessary as a result of the coronavirus pandemic, according to a new report from research firm ABC Insights.

  • The survey, which is based on responses from 142 top leaders, shows most intend to “hunker down” and wait for the virus to pass. But more than half predict they will need to cut budgets across the board. 

  • Already, colleges’ finances have suffered as many institutions refund student fees and invest in new infrastructure for online learning. 

Dive Insight:

The coronavirus immediately hamstrung some colleges’ budgets after many administrators asked students to vacate dormitories and decided to return some or all of their lucrative room and board money. Colleges have come to rely on those funds much more in light of lackluster state investments in public higher education and high discount rates among private colleges.

Even some large institutions, such as the University of Wisconsin-Madison, have said refunding room and board will be a burden. The university expects a $100 million loss from the pandemic, which includes paying students back for some room and board costs, but not refunding tuition and fees — something the university said it would not do.

Enrollment yields — the number of admitted students who end up attending an institution — have also been thrown into question as officials mull whether the economic fallout from the virus will curtail the number of students who can afford college. 

The ABC Insights survey, done in conjunction with the Rpk Group and the Association of American Colleges and Universities, reflects those concerns.

Seven in 10 presidents surveyed are bracing for a revenue decrease of 10% or more in the coming fiscal year, which will likely result in cost cutting on the administration side. All presidents surveyed from four-year public colleges, and most presidents from two-year and private four-year institutions, anticipate reducing administrative costs. And 83% of all presidents said they anticipate a hiring freeze. 

Brown University, Boston University and the Montana University System are among the many that have suspended hiring. 

Around half to two-thirds of presidents surveyed, depending on institution type, said they would furlough or lay off staff. 

On an optimistic note, a majority of college leaders don’t expect to change tuition rates. And more than half of public college presidents, and two-thirds of community college leaders, do not anticipate shrinking academic programs. About 44% of private college presidents said they likely wouldn’t cut programs.

Across all institution types, 85% of presidents said they would provide room and board refunds. Few four-year presidents anticipate refunding tuition, with only 6% of private leaders and 12% of public executives responding that they may do so. That’s compared to more than half of two-year presidents who said the same.

While higher ed organizations pressed the federal government for a $50 billion cash infusion for the sector, the coronavirus stimulus package Congress passed recently provides only $14 billion, which the American Council on Education (ACE) called “woefully inadequate.”

Institutions receiving aid must use half of it for students who have been disadvantaged by the virus. ACE and the National Governors Association each wrote to U.S. Secretary of Education Betsy DeVos last week, urging her to swiftly disseminate the funding. She has not yet announced the timeline for distributing the money.

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