Colleges and Universities Already Panicking About Finances Over Shutdowns
“the pandemic has shaken the financial stability of most private and public colleges”
We’re just weeks into the Coronavirus crisis, but many colleges and universities are already facing financial meltdown. Tucker Carlson recently predicted some schools would not survive this, and he was right.
The reason things are unfolding so quickly is that many schools were facing financial strain before the crisis hit.
Kirk Carapezza writes at WGBH:
Struggling Colleges Face Financial Nightmare With Students And Classes Off Campus
Even before the pandemic, many small private schools like Hampshire were facing a financial situation reminiscent of the nightmare in the Stanley Kubrick film. Wingenbach said the college had figured out how to survive, launching a $60 million fundraising campaign led by Hampshire alum Ken Burns, the documentary filmmaker.
“It was just a question of being really disciplined about how much we spend and how we allocate our resources,” Wingenbach said.
But the pandemic has shaken the financial stability of most private and public colleges. Collectively, they owe graduating students millions of dollars in refunds for room and board — returning students are being offered credit toward next year’s housing instead of a refund, to cushion the blow of the losses. The outlook is so bleak that Moody’s Investors Service changed the credit rating for higher education from stable to negative a few weeks ago…
Hampshire is on the hook for about $900,000 in room and board refunds, according to Wigenbach. If current students are reluctant to leave home, or families can’t afford to pay, Hampshire will take another unexpected hit this fall with the loss of housing and tuition payments.
Many schools were already worried about lower enrollment. Now they are worried that some enrolled students won’t return in the fall.
From CBS News:
Colleges suffering huge financial blows from pandemic
Colleges across the nation are scrambling to close deep budget holes and some have been pushed to the brink of collapse after the coronavirus outbreak triggered financial losses that could total more than $100 million at some institutions.
Scores of colleges say they’re taking heavy hits as they refund money to students for housing, dining and parking after campuses closed last month. Many schools are losing millions more in ticket sales after athletic seasons were cut short, and some say huge shares of their reserves have been wiped out amid wild swings in the stock market.
Yet college leaders say that’s only the start of their troubles: Even if campuses reopen this fall, many worry large numbers of students won’t return…
“If you play out the scenarios that are out there, it really makes you nervous,” said Mary Papazian, president of San Jose State University, which estimates it will lose $16 million by the end of May. “We may be looking at cutting academic programs if it comes to it. We may be looking at laying off people. It’s a dire situation if the worst comes to pass.”
The recently passed stimulus bill included some money for colleges and universities, and they seemed to need it yesterday.
Kery Murakami writes at Inside Higher Ed:
Anxious Wait for Stimulus Money
When Congress set aside about $14 billion specifically for higher education in the stimulus bill it passed two weeks ago, lawmakers had the well-intentioned goal of most of the money going to colleges and universities that serve larger shares of lower-income students.
But lawmakers also didn’t want to penalize large institutions that don’t enroll as many lower-income students.
The way Congress decided to deal with the issue, however, has complicated how billions of dollars of aid will get to colleges, lobbyists representing colleges and universities worry, and it could delay the money as campus leaders are anxiously dealing with a financial hit from the coronavirus epidemic.
“We are deeply worried the institutions’ money won’t go out, in the best-case scenario, for a month, and in the worst-case scenario for several months,” Terry Hartle, the American Council on Education’s senior vice president for government and public affairs, said during a webinar last week for members of the Education Writers Association.
How long will it take for Democrats to propose a higher education bailout?
When that happens, Republicans should hold out until schools start cutting pointless administrators and departments.
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Millions and Millions WILL NOT be back this Fall semester.#
The DEM Party run administrations did this to themselves.
Let Dem Schiff their pants – and no government bail out.
#March 30, 2020 Chronicle of Higher Education
A huge problem for small schools is the lightning fast move to online education. Why sign up for a small school in the woods somewhere if there’s not going to be any “campus life”, no new friends from different areas? If you’re going to sign up for online classes, best to just sign up for Big State U. for the name recognition. Also, if students aren’t living on campus, then why have any limits to admissions at Big State U? Let everybody who wants, sign up! Who cares how many?
It all adds up to massive consolidation.
And in that time honored college tradition, raise tuition for on line learning.
Or…….doesn’t Harvard have 40 billion or so dollars in their endowment fund? A little socialism among colleges would be fun. From each according to their endowment funds, to each from those filthy rich endowment funds.
The colleges already charge extra for online courses – technology fees.
Consolidation was going to happen anyway, but now it will be rapid. Think of all those cocy Twillie like administrators finding themselves in the same economic situation they have been imposing on their graduates?
REMEMBER…….
COLLEGES AND UNIVERSITIES STARTED THE ECONOMIC SHUT DOWN.
Eternal Curses upon them all.
I wish that I could give that more thumbs up. It is absolutely certain that tele-working and Zoom is the future in business to the extent possible, with all sorts of fallout for commercial real estate and public transportation, etc. How can higher education avoid the parallel development in remote learning, with similar consequences for college real estate, needed faculty, etc? If existing colleges do not respond, why wouldn’t you soon see a new national Covid U, with courses presented by leading professors in the country for a lot less that $50K tuition per year?
I’m having a hard time feeling any sympathy for quasi communist indoctrination centers.
Government should represent all of the people, and thus government bailout money should be hard to find for institutions/organizations that treat half the population like second class citizens.
Maybe if half of these places went back to being colleges they wouldn’t have this problem. Close down diversity studies, and get rid of vice president of diversity and inclusion. That will save a chunk right there.
How are Evergreen and Oberlin doing? They should be shutdown permanently.
Evergreen will be fine. It is in one of the best states in the Union for an openly racist and socialist school. The state legislature and governor will fall over themselves to funnel money to that cesspool.
And, maybe, Oberlin should reconsider a settlement with the Gibsons. How much are Oberlin administrators shelling out in ongoing legal fees to appeal the jury’s verdict?
I honestly believe that Oberlin would prefer to go bankrupt and shut down completely rather than give the Gibson’s one dime.
Be pretty funny if, in the end, the Gibson’s get to foreclose on the Oberlin campus.
Tom, the current obsessive-compulsive management at OC, could well sink the ship just to drown a fly. I hope that there is a legal way to appoint a receiver and throw out the current BOT. There is much good in this college that sick management has betrayed. They have made themselves the laughingstock of much of the country. https://OberlinChaos.com will have much to say about OC’s managerial betrayal soon.
The current college president has compensation of approximately $110K PER MONTH. Is she worth it? She would be a great street lawyer, but street lawyer skills are the skills needed to run Oberlin College into the ground.
Plus, given they spent $5 million at trial and that they hired an entirely new group of high priced D.C. attorneys, it is likely they have insurance paying for a substantial piece of this legal work.
A year ago, Prof. Jacobson opined that the insurance might well not pay since Oberlin has may have violated the terms of the policy. This issue is out of the headlines until a final liability amount is determined.
If Oberlin were smart – oxymoron? – they would settle and move on. Blame it on the coronavirus. “Given Covid-19, the College has determined that it is necessary that all of our attention and resources be devoted to addressing this major challenge and that distractions such as this lawsuit must be removed as expeditiously as possible.” (Gibson’s revenue must have also taken a hit with the pandemic and they could also be more amenable to settle.)
They are hoping to celebrate an ecumenical Easter and Passover in which a kosher Easter Bunny will lay golden eggs for the College. Problem is, rabbits don’t lay eggs.
“Diversity studies” = Useless affirmative horseshit.
Nuke the entire Academy, from orbit…
It’s the only way to be sure.
Present company excluded, of course.
You know what they say about cockroaches.
“Lather, rinse, repeat,” it is, then.
Just imagine the savings if crayons and Play doh were stripped from University budgets.
Finally some good news.
Next up….State and local governments see a significant reduction in tax revenue due to our self-inflicted economic disaster.
They are all bloated anyway.
“the pandemic has shaken the financial stability of most private and public colleges.”
Cry harder.
Wut? Wasn’t “children” redefined to include the 18-27 bracket? Wouldn’t they qualify for the daycare handouts?
I was under the impression that many of the colleges were not giving back the money. If that is so, how are they hit?
I did not know how colleges worked until I became a professor at a medical school. I was amazed. These institutions fight for an assessment that places them in the top echelon of academic centers. That placement is determined by a number of factors. Prominent among these factors is the attrition rate. Thus, with many students not returning, the rate will be very high and throwing them into the lower levels of assessment. This is so bad that at the medical school level, you literally can not fail. Even if you decide to not be a doctor, they will still push you through if at all possible. Another factor is passing or placement is test designed to get the student a license or a placement in a graduate position. To get a license as a doctor, you must pass three exams at different periods in your training. The first is following the first two years of school, then graduation then following your internship. Schools are very competitive in pushing the students through these exams as again they are looking at their measure of so called success. My school was so bad about this that they would identify the students most likely to fail and send them to a six week course in Las Vegas to teach them all the answers on the exam (note, not the needed material to be a doctor, but the literal answers).
Our academic centers are a joke. They are kept alive by reputations gained 50 years ago. A shake up is necessary.
“If that is so, how are they hit?” Impending class action lawsuits.
with the course work being pushed on line, why even live on campus. what is the incentive to live in a dorm when you attend class on your own schedule?
Not living on campus keeps the college debt down as well.
One will argue living on campus is part of the social experience and that is a legitimate argument,a decision every family will make.
“One will argue living on campus is part of the social experience and that is a legitimate argument, a decision every family will make.”
That is a fallacy – the idea that a youngster is “exposed” to a variety of people from different backgrounds and thus “grow” as a person is way overstated. Much of college is given to partying, alcohol, drugs, and avoiding learning. Many people hang with their own cultural clique. Th frat and sorority system is just the most glaring example. Off campus apartments are mini-gtribes of likeminded people. The cancel culture so entrenched on campus does nothing to exposure folks to a variety of views or people, just shrill left wing authoritarians.
Better exposure could happen by taking a gap year or two in the limitary, a blue collar job, what have you.
Very good news. Let those arrogant, worthless, ungrateful America hating communist bums go into the private sector and actually have to earn their pay. They’ll have to double their hours for 1/2 the compensation. Most will work at temporary agencies. Former students, with careers unrelated to their worthless degrees, can visit them at the drive up window.
Many, probably most college administrator have few useful skills.
Here’s a thought-proposal for a big pointer on, say, a Health Outcomes & Policy final exam:
Is IHME (ie, are the Gates’s) paying attention to this problem — feeling maybe just a little bad, or possibly even responsible to some extent? (Is the Institute’s UW-related budget presently affected?) Its (the Gates’s?) recent assumptions, conclusions, and derived estimates before and during the COVID-19 debacle seem directly related, arguably contributory to the present academic financial disaster, among other noteworthy “Covidian” things.
I could envision some direct or indirect compensation to students and their enrolling academic institutions this year for their losses. Might IHME’s benefactor/patrons see the same? I wonder.
Are calculation errors (whether via commission or omission, but in any case based on institutional/conceptual biases) free of accountability? True freedom comes with costs and obligations.
The philosophical studies of cause and effect and of moral responsibility and its implications for freedom would still seem to be worthy matters; and their fitting applications to real-world consequences are integral and substantial in the pursuit of equitable outcomes for a just society.
To whatever extent if so, or if not, please address these intertwining claims and explain in the present, “Covidian” context.
True freedom comes with costs and obligations.
And true freedom means you get to decide yourself, even in times of danger – not some souless, heartless, cash register for a heart college bureaucrat.
My “pipe dream” – A welcome consequence of government reaction to the “pandemic” – the over capacity in post-secondary school “industry” will be rationalized; the abundance of the “uneducated”, “skill-less”, and “semi-skilled” among US citizens will be revealed (perhaps more will not take for granted their birth right to citizenship); affordable “vocational” schools will better prepare apprentices for many “professional” (e.g., legal, accounting, nursing, administration, etc.), and skilled manufacturing and production roles (e.g., computer programming, CAD/CAM design, machine operations and repair, etc.); the true unemployment rate will be obvious once college enrollments are reduced; government funding and subsidies to colleges and universities will be drastically cut and redirected (and the fraud that is “not-for-profit”, tax exempt entities will be eliminated; perhaps there will be a “windfall” tax on all excessive endowment funds) … and, K-12 pedagogy will revert to training students how to be independent, thinking, freedom-loving members of society (because they will have learned how to teach themselves); and colleges will facility broad base unbiased academic studies. … Less wealth to fund parasitic government (and civil service unions) at all levels of society and a populace that better understands the value of money, that its primary purpose is not as a measure of “success”, but its role in a healthy society as a medium of exchange and store of value. … And, may be “government” will lose some of its stature as the “established religion” of these United States. …
I teach at a university hospital and yes, there are going to be substantial effects. While any number of commenters here are hostile (correctly) to the idiocies that plague the modern academy, there are good things that need support. Universities are going to have to figure out how to navigate this or we’ll lose some of what we need for the future.
True STEM programs will be hit hard. When universities clamp down on spending we’ll end up throwing out the seed corn for the next generation of scientists and engineers. As we consider a world where we need to respond to pandemics, keep in mind that it’s todays scientists and engineers who have been helping with this (from HCQ and zinc to helmet ventilation to rapidly manufactured face masks).
Business academic programs will be hit hard also; businesses are discovering how many people (and how much office space) they DON’T need. I suspect MBA programs will take a big hit.
Humanities will need to be separated into two groups: that which we truly need (and we do) and that which is the usual progressive idiocy. Good luck trying to protect the former as we deal with the latter.
We can rejoice that (perhaps, maybe) diversity administrators will be hit hard. But don’t count on it; these people know how to survive and they’ll play nasty. What we may see instead is even more ideological rigidity as the progressives “circle the wagons”. More moderate and conservative voices are at greater risk.
So be careful as you rejoice about what’s about to happen to academia — it may not go the way you want it to do.
Doesn’t matter now that ALL public education is Totally Dead.
Majority of Americans are forming new habits and most will not return to the old Leftists “normal.”
Another helping of Obama’s 57 genders anyone?
Not sure why you think this: “True STEM programs will be hit hard. When universities clamp down on spending we’ll end up throwing out the seed corn for the next generation of scientists and engineers.”
STEMs are actually money makers for the schools — they charge extra fees, companies make grants to have access on campus, graduates find jobs, make donations, etc. STEM courses are probably the area that good colleges — not some small, leftwing, lost in the literal woods institution that teaches nonsense – will use to sustain themselves.
So right on. I have built a blog attempting to alert people to the betrayal of Oberlin College by some in its Board of Trustees and administration. The vitriolic education critics posting on this blog would be well advised to stop gloating over the goofs made by incompetent and disloyal management.
I recently retired from my state university, and this shutdown could be the nail in its coffin. In the last five years, enrollment on campus has plummeted from 9300 students to just 5300. Enrollment projections for this fall were already looking bad, but now estimates are it will drop by at least 25%. That will be a death blow. We’ve already done lots of layoffs, closed 10 out of 16 dorms, shut down 5 of the 7 dining halls, and closed various campus facilities like the student bowling alley. (On a good note, we eliminated useless majors like Women’s Studies and Philosophy! It was getting hard to justify supporting entire departments that had fewer than 10 majors.) This next year just might be the year when everyone finally admits, “Wow. This university could really close its doors after 130 years.” I’ll be surprised if the university is still around in five years.
Did your administration reduce the number of administrators, particularly the ‘diversity’ cohort as well as eliminating worthless majors?
See me playing my very tiny violin? I taught as a STEM adjunct for over ten years, so I know first-hand there are far too many people attending college who neither want nor need to be there – most of them go because of pressure from parents or career counselors, and not from any genuine desire to get an education. This bubble’s burst is long overdue.
Interesting to know how many noble prizes were earned by each college’s graduates, that is before the prizes became just another socialist joke.
I consider myself fortunate to have known many Nobel laureates. None of them (26), were “socialist jokes”.
wow, 26 Nobel laureates. you must be one really special dude.
So what is the downside? I don’t see it. Unless the downside is that academia, which heretofore was mostly immune from the business cycle, is now exposed to market disruption?
The bottom line is that many of these small, pretentious, self proclaimed ivy league quality universities will either fail or contract to their originally chartered core purposes. Similarly, expect a refocusing within public universities to core programs with many of these dubious x-studies courses eliminated.
Likewise, smaller states like Alabama, will go through another round of eliminating overlap in public universities; one law school, one pharmacy school, one medical school. Undergraduate programs the same, one type of engineering program here another there, but not every engineering discipline everywhere. The duplication and overlapping isn’t affordable.
Talking with my daughter who is on staff at a small Christian college down south. It’s highly considered as a quality college, and many of its programs such as engineering, nursing, and fine arts are at the top of the field, even in the secular community.
Yet, they are taking a real hit. The board met Monday and worked up five different scenarios that are most likely… and they range from bad to really, really bad. Nothing good is in the near forecast.
They will survive, but it sure won’t be the same ten years from now as it was ten years ago.
These colleges are in the forefront of despising business and destroying capitalism. Did it not ever occur to them they are the product of both those societal elements, as well as the churches they equally despise.
They did this to themselves. They hired faculty that hates Judeo-Christian beliefs, America, capitalism and even people who engage in business. Let is see how these SJW fend for themselves.
I am an instructor at a fairly popular private college in the south. We switched to on line and I do not meet for class hours. In the department we approved going asynchronous and posting videos, etc. then having them do series of assignment. We meet from time to time, but that’s it.
My point is that a father called today raising hell that his son isn’t doing anything and for what is he paying $50k/year… and he’s right!! It’s all a bunch of horseshit.
These colleges will go through what the restaurants go through. The ones that are able to come out the other side should be better positioned due to the culling of competition. But it remains to be seen how bad this gets and I am afraid to think about it too much….,
Welcome to Scott Paper Mills U.
Where will HBCU’s be in two years? Most of them have operated hand-to-mouth for decades and now the hands are empty, or nearly so. We’ll probably hear cries of “RACISM!” as they go under and we must be prepared to counter with cries of “RESPONSIBILITY!” of our own. Consolidation will save many but the rest will close down.
Same for small faith-based schools. Normally they enjoy money from their denominations which are now in financial binds of their own. The better heeled groups, beginning with LDS and possibly Southern Baptists, may be able to help them but others not so much. I’d hate to see Cumberland College outside Chattanooga go under but the Presbyterians might not be able to prevent it.
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A time for the colleges and universities to take a hard look at nonessential services and offerings. There has been a lot that was spawned under ever-broadening interpretations of Title IX, diversity requirements, and all the support structures that were erected under the “Dear Colleague” letter. How much of that actually enhanced the students in their education, versus how much of that was panicky reaction to professional grievance mongering?
The Feds taking over the student loan program didn’t help, either. The institutions could build their visionary designs without having to be all that concerned about cost. Tuition went up, and so did the Federal loan guarantees. If they were actually studying human nature, they would have seen this outcome at the first serious governmental crisis.
The financial crisis hitting colleges and universities is good. news–maybe they will get rid of all those affirmative action administrators and phony left-wing ethnic studies, gender studies, etc departments.