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College Revenues Shrinking During Coronavirus Pandemic

FLE- A University of Connecticut student waits for the traffic light to change outside a dormitory building on the campus in Storrs, Conn., Sept. 18, 2015.
FLE- A University of Connecticut student waits for the traffic light to change outside a dormitory building on the campus in Storrs, Conn., Sept. 18, 2015.

U.S. colleges and universities are bearing a greater financial impact from the coronavirus pandemic than anticipated, education officials say.

And they are asking for help.

The schools received $2.9 billion in federal support through the Coronavirus Aid, Relief and Economic Security (CARES) Act in March, and another $2.9 trillion in assistance is proposed through the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act.

But aid for the educational institutions was already lagging from reduced funding since the 1980s, accounting for tuition and fees tripling in the past four decades. Universities responded by increasing their costs.

“Over the past several decades, there has been a substantial shift in the overall funding of higher education from state assistance, in the forms of grants and subsidies, to increased tuition borne by students,” the U.S. Treasury Department reported in 2012.

When the pandemic hit -- sending students online, shutting down campuses and diminishing enrollments -- university coffers lost more than $120 billion, “especially in areas such as testing, contact tracing, quarantine, treatment and learning technology,” wrote Ted Mitchell, president of the American Council of Education, to the U.S. House of Representatives on Sept. 25.

UConn request

The University of Connecticut (UConn) has used up $35 million it moved from the budgets of its Storrs and regional campuses, according to the school. It is asking for a state allocation of $28 million that, added to $13 million from its current fiscal year, would make up for shortfalls in funding.

“We know that we have already cut substantially over the past several years, and this $28 million additional round of cuts will cause pain at the university,” Scott Jordan, UConn’s chief financial officer and executive vice president for administration, said in a statement published by the university.

FILE - A building at the University of Maryland's Baltimore campus is seen after sunset, Aug. 19, 2019, in Baltimore.
FILE - A building at the University of Maryland's Baltimore campus is seen after sunset, Aug. 19, 2019, in Baltimore.

The University of Maryland (UMD) has also taken a hard hit as it faces a $292 million budget cut in the next fiscal year. Some employees will see a salary cut, but those who earn less than $150,000 annually will not face reductions, according to The Diamondback, the student newspaper.

School President Darryll Pines described the coronavirus’s impact on UMD’s budget as “by far the largest financial crisis in the history of the university” in a virtual town hall meeting to explain budget shortfalls.

UMD will also face 5% cuts for each academic department, and facility improvement projects will be postponed, Pines wrote in a campuswide email to students and staff. The welfare of the school community, he wrote, matters more than the budget cuts.

“Please know that you have leaders in this institution thinking about members of our entire community who may be the most impacted by even a small change in their paychecks,” he said.

Weighing costs, benefits

Dennis Scanlon, a professor of health policy and administration at Pennsylvania State University, analyzed how universities are handling the pandemic according to several factors: “mortality, morbidity, disruption to operations, and then reputational impact.”

“How severe and serious is it? What are the treatment needs? So, making sure that if you're going to potentially increase the risk in a population of disease spread, which certainly would happen from going from everybody staying kind of sheltered in place to opening up to some degree,” he said in an interview with The American Journal of Managed Care.

FILE - A view of buildings on the campus of Pennsylvania State University in State College, Pa., July 11, 2012.
FILE - A view of buildings on the campus of Pennsylvania State University in State College, Pa., July 11, 2012.

Scanlon said that while he believes the health of the university community is important, so is weighing costs and benefits.

“No matter how you slice it, there's uncertainty, and there are costs and benefit trade-offs. That sounds perhaps to some a little bit crass, but really trying to weigh the risk, what level of risk may be worth taking, and what are the costs to mitigate that risk,” he said.

Scanlon told AJMC that universities and colleges are awaiting more support.

“I think a great disappointment from my perspective is sort of the lack of speed of having more guidance, quite frankly, from federal and state level health officials about what to be done, and more specific guidance,” he said.

ACE’s Mitchell said he hopes higher education will receive needed funding to support education for jobs that could help a faster recovery from the pandemic.

“Our schools train the doctors, nurses and other front-line workers needed to address this unprecedented health crisis and perform the research necessary to produce the urgently needed vaccines and treatments. Finally, our schools educate 26 million students, preparing them to compete and succeed in an increasingly difficult economy, and fueling the path towards a recovery,” Mitchell said in a letter to Congress.

See all News Updates of the Day

‘Study away’ programs in the US can provide enrichment opportunities 

FILE - Students walk on the campus of Boston College, April 29, 2024, in Boston.
FILE - Students walk on the campus of Boston College, April 29, 2024, in Boston.

While studying abroad can expose students to new cultures and experiences, researchers are finding that domestic ‘study away’ programs can be helpful as well.

Some students, including those on an international visa, may not be able to study abroad, but they can travel to other locations in the U.S. for enrichment experiences, Ashley Mowreader writes in Inside Higher Ed. (October 2024)

Fewer students disclose race in applications to top colleges 

FILE - An unidentified person walks past Harvard yard at Harvard University in Cambridge, Massachusetts, December 7, 2023
FILE - An unidentified person walks past Harvard yard at Harvard University in Cambridge, Massachusetts, December 7, 2023

FAfter the Supreme Court’s decision to end affirmative action in college admissions last year, fewer students are disclosing their race or ethnicity in applications to top colleges.

Writing in USA Today, Zachary Schermele notes that the data is preliminary, but it could signal a change in the way students are approaching college applications. (October 2024)

Overall college enrollment is up, first-year enrollment down 

FILE - A student delivers packages to the dormitory at DePaul University in Chicago, Wednesday, Aug. 28, 2024.
FILE - A student delivers packages to the dormitory at DePaul University in Chicago, Wednesday, Aug. 28, 2024.

For the second year since the beginning of the COVID-19 pandemic, college enrollment has climbed in the United States.

But the National Student Clearinghouse Research Center noticed a substantial drop in the number of freshmen, which could be troubling for future enrollment, according to a report in Forbes. (October 2024)

South African universities embrace AI, seeing it as equalizing tool

South African universities embrace AI, seeing it as equalizing tool
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The rise of AI tools like ChatGPT has sparked debate in higher education, raising questions about ethics and integrity in teaching, learning and knowledge creation. In South Africa, some academic institutions are taking a proactive approach, integrating AI into their curricula. Experts say this step is not only innovative but also helps level the playing field among students. Zaheer Cassim reports from Johannesburg.

International students may be able to get jobs at school 

FILE - Northeastern University graduate student Shabbir Hussain, of Indore, India, left, views a computer screen at the entrance to the Snell Library on the Northeastern University campus in Boston on May 24, 2016.
FILE - Northeastern University graduate student Shabbir Hussain, of Indore, India, left, views a computer screen at the entrance to the Snell Library on the Northeastern University campus in Boston on May 24, 2016.

International students studying in the United States may be able to work on campus.

Jobs can include working in libraries, labs, food service and dormitories – but students will have to research the rules before applying for jobs, according to U.S. News & World Report. (September 2024)

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