Colleges and universities with massive endowments will be fine, but schools which are already experiencing financial problems could be in serious trouble.
Inside Higher Ed reports:
Coronavirus Closures Pose Refund QuandaryStudents across the country are making hurried plans to move out of their dorm rooms as the number of campus closures over coronavirus concerns skyrocketed past 200 Thursday.Away from their dorms and dining halls, many students and parents are wondering if and when they’ll be refunded room and board fees.But for colleges relying on such fees — called auxiliary fees — to support their operating revenue, refunds could be devastating.“Every residential college and university in America relies on that auxiliary revenue stream. It is baked into the budget,” W. Joseph King, president of Lyon College and co-author of How to Run a College, said in an email. “Significant refunds will cause real problems at many institutions. It will just be worse for those with tighter or deficit budgets.”Auxiliary services are becoming an increasingly important part of colleges’ operating revenue, especially for private, four-year institutions.“Most colleges run their own housing. It is usually their biggest source of auxiliary revenue,” King wrote. “Assuming the residence hall is paid for, the net auxiliary revenue can be substantial. Even if it is financed, there is usually a positive revenue stream.”Smith College, a women’s liberal arts college in Northampton, Mass., with approximately 2,400 students, is requiring all students to move out of on-campus housing by March 20. Smith said it will offer prorated room and board refunds. In fiscal year 2018, Smith collected $40.4 million in residence and dining fees — about 16.5 percent of its total operating revenue.
CLICK HERE FOR FULL VERSION OF THIS STORY