When the University of California’s Board of Regents looked closely at the numbers in September, it was the visual equivalent of a clap of thunder. The massive university system, with 10 locations and more than 285,000 students, was bleeding money – $ 2.2 billion in lost revenue and additional costs, largely due to the pandemic.
While some of these losses came from medical centers temporarily abandoning high-paying electoral processes to treat COVID patients, the bigger picture was as annoying as it was simple: in the age of pandemic distance learning, the sites were largely deserted. And if the students don’t live on campus, the schools don’t make any more money. Fast.
“Colleges and universities receive very high premiums for their apartments. It’s a great source of income for them, ”said Dr. Jorge Nieva of the University of Southern California’s Keck School of Medicine. “But for many, many schools, they just can’t work personally right now.”
Often times, when they try, the results have been terrible. An ongoing New York Times survey of approximately 1,900 colleges and universities recorded more than 321,000 viral infections on campus among students, faculties, and employees with at least 80 deaths. Most of the deaths occurred in the spring, and hundreds of schools have since opted for either 100% distance learning or strict restrictions on the number of students on campus.
Based on administrators’ understanding that it is next to impossible to contain the spread of COVID-19 in classrooms, dormitories and cafeterias, these decisions are prudent and in line with local and state health protocols. But as schools try to finalize plans for the winter quarter or spring semester starting next month, a sense of fear has crept in. Without student housing and meal allowances, the budgets will be used up again.
The expected arrival of a coronavirus vaccine is welcome, but in many locations it is unlikely that students will pay for room and board again by fall – and even then, perhaps in smaller numbers. Larger schools and private universities with major foundations will almost certainly get through, but after that the picture becomes cloudy.
“We suspect some of the smaller schools won’t make it,” said Patricia Gandara, research professor of education at UCLA. “Some liberal arts schools in particular have trouble staying afloat. It’s a really terrible problem. “
In fact, a recent model created by a Boston education company, Edmit, estimated that more than a third of the private four-year colleges it studied might need to merge or close over the next several years. Scott Galloway, a professor at New York University, has now identified more than 90 universities that fall into the “Low Value, High Vulnerability” quadrant of his analysis, which means that they are already in financial difficulties and possibly due to the budgetary effects of the Being marginalized by the virus.
The national numbers are staggering. In a letter to Congress in October, the American Council on Education said it had estimated the pandemic would cost colleges and universities at least $ 120 billion. In each category of university operations, the council wrote: “Income has fallen and expenses have increased significantly.”
In many large school systems, these losses are exacerbated by government budget crises, also due to COVID-related economic downturns – and they follow a decade in which government funding has already been cut significantly. California cut its general fund contribution to the UC system by $ 472 million for 2020-21, and federal relief is uncertain with a likely split government, education advisor Ben Kennedy said.
Smaller schools are more vulnerable to an immediate threat. That summer, tiny Wells College in New York’s Finger Lakes area considered closing its doors permanently. “If we don’t have room and board income, we won’t have enough income to run the campus for next year,” said President Jonathan Gibralter. The college finally decided to open this fall with students in the dormitories. There was a “break” in November during which face-to-face classes were interrupted and students were advised to essentially stay in their dorms after positive cases of COVID emerged in Wells. The students eventually left campus on Thanksgiving break and, as Wells had planned months earlier, will end the semester remotely.
It is important for Wells and other small schools to collect even a fraction of a semester’s living and dining fees. According to research by the College Board, the cost of room and board has increased faster than tuition and fees at public two- and four-year institutions over the past five years. In 2017, the Urban Institute found that the cost of room and board had more than doubled since 1980 in inflation-adjusted dollars.
Some of this has to do with the way the college prize game is played. Schools often post sky high tuition fees and then offer to put them down – often by 50% or more – through grants or scholarships. The profit margins on housing and catering services make the difference in budget.
At UCLA, a state student in campus housing, the school estimates, would pay $ 13,239 for tuition and $ 17,599 for room and board this school year. Foreign and overseas students pay an additional $ 29,754 in “additional tuition,” a premium that many schools have aggressively raised over the past decade to help meet funding shortfalls following the 2007-09 recession.
The University of Florida charges citizens of $ 6,380 in tuition and $ 10,590 in room and board. At Dartmouth College, students from families with incomes below $ 100,000 can expect a grant for retail fees of $ 57,796, with an additional $ 17,022 for room and board.
Campus lockdowns were devastating. From March to August, UCLA lost nearly $ 185 million in canceled housing and dining programs and “lost enrollments” in part of a worst-case revenue decline of $ 653 million. Despite UCLA’s losses, the overall registration level of the UC system remained unchanged.
Distance learning will continue in the UC system through at least March, with on-campus accommodation again serving students only with no other options. UCLA dormitories were about 10% full this fall.
Schools across the country are generally governed by the health and safety guidelines of their city or district. If the nation delves into the worst of the pandemic, it means few options for returning to campus until a vaccine becomes available to students, which can last well into summer.
However, there are some differences. While USC has taken Los Angeles County’s very cautious approach to reopening, Princeton University in New Jersey went the other way, announcing that all enrolled students would be offered on-campus accommodation in the spring, even after classes remained largely remote. (Princeton room and board for the spring semester is $ 8,910 according to the university’s fee schedule.)
With more than $ 5.7 billion in foundation assets, USC can survive for longer on reduced housing and hospitality revenues, as can the UC system, whose collective foundation assets total $ 15 billion.
However, as the pandemic progresses, the pressure on schools that are relatively underfunded or have already been leveraged will only increase. When MacMurray College in Illinois announced its closure earlier this year after 174 years, its president noted that 2020 was the third straight year that MacMurray was in deficit. This was part of a longer pattern of students interested in larger schools and their facilities.
“If an institution didn’t have a structural deficit with dwindling reserves before COVID, they should be fine now,” said Kennedy, the education advisor. “If you’ve been two to four years away from an existential crisis, COVID has likely got you so far that you won’t be able to return.”
This KHN story was first published on California Healthline, a service of the California Health Care Foundation.
Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
This story can be republished for free (details).
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