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Financial Experts Warn Declining Enrollment Could be Disastrous for Many Colleges

Financial Experts Warn Declining Enrollment Could be Disastrous for Many Colleges

“downside scenario assumes a slower economic recovery driven by prolonged or recurring coronavirus-related disruptions”

At this point, many people will shrug over this. Higher education is due for a reckoning.

Campus Reform reports:

Financial experts sound alarm on colleges going bankrupt

A new report from Fitch Ratings warned that declining revenue from tuition costs could threaten the financial solvency of private colleges.

As families of students struggle as a result of the coronavirus, colleges could be forced to discount their tuition rates to unsustainable levels, according to the report, even as the number of students enrolling at these colleges also decreases.

“For higher education,” the report said, “the base case assumes that most residential campuses will reopen for the fall 2020 session with enrollment declines of up to 10 percent. Fitch’s downside scenario assumes a slower economic recovery driven by prolonged or recurring coronavirus-related disruptions, including sporadic campus closures into 2021.”

“This scenario anticipates larger enrollment declines of up to 20 percent in addition to other operating and financial pressures, such as underperforming auxiliaries and weaker endowment financial performance,” the report adds.

A 10 percent enrollment decline would lead to an average revenue decline of 8 percent while a more severe 20 percent enrollment decline would result in an average revenue loss of 17 percent. Both, according to the report, would require offsetting measures.

“In a 5 percent decline scenario, about 65 percent of private colleges would maintain coverage in line with current rating levels. With a 10 percent decline, about 50 percent of institutions would maintain sufficient coverage, and at a 20 percent decline, just 15 percent would.”

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Comments

It was coming anyway. COVID is just accelerating the process.

notamemberofanyorganizedpolicital | June 18, 2020 at 12:09 pm

Is that Pollyanna Fitch Ratings?

Enrollment at kollege in my city this summer is down approximately 50 to 60%. A lot of the summer enrollment leads to fall enrollment so I’m anticipating all across the nation enrollment will be down at a minimum 20% and more likely will be down 40%.

Remember too, that the foreign student enrollment, especially from communist China, will be much much more down then U.S. student populations.

    foreign students are the cash cow for many colleges, we have no idea what regulations will be attached to a student visa. i would expect many so stay home until this settles down. colleges won’t be cramming as many kids into the dorms this fall decreasing revenue as well.

    We are also getting the occasional withdrawal, both from foreign and domestic students.

    However, we are getting deferral requests up the wazoo from foreign students who cannot get their visas.

    Maybe Trump’s visa move is a positive after all.

With the way higher education is going, this is terrific news.

Dantzig93101 | June 19, 2020 at 12:32 am

Academia will just have to set priorities. Core subjects can’t be cut: gender studies, racism studies, and so forth. Frivolous subjects such as mathematics, science, and remedial reading will be on the chopping block.

    notamemberofanyorganizedpolicital in reply to Dantzig93101. | June 19, 2020 at 1:16 pm

    The Australian

    Radical shake-up for university fees proposed

    Humanities students will face a massive fee hike

    while those studying maths, teaching and …

    a comprehensive university funding shake-up to be announced by the Morrison government

      notamemberofanyorganizedpolicital in reply to notamemberofanyorganizedpolicital. | June 19, 2020 at 1:18 pm

      Fees for courses that lead to jobs in high-priority sectors, such as health and teaching, are set to be cut, while the cost of already-popular degrees, such as arts and law, will be increased.

      SBS NEWS

Hieronymous Machine | June 19, 2020 at 10:27 am

Yale just announced that fall semester will be mostly-to-completely “remotee”:

“Students may return to New Haven and live in-residence in de-densified conditions, classes will primarily be offered using remote modalities.” [Ed. note: “modalities”; snort.] and retain “ability to swiftly transition to an entirely remote scenario.”

He-llooooo Gap Year! What does first-year orientation look like under this scenario? A 3D virtual reality of walking across Old Campus for the freshman (sic) club rush? Zoom in to Durfees to try to grab that guy’s number? And how does one go about mischief? Do you have to “find” *other* ppl’s vids of the steam tunnel?

More broadly, how many colleges are about to go under? Evergreen? (No big loss.) Hampshire? Oberlin? (If onlly). World’s getting weird.

“…de-densified” There in a single word tells you all you need to know about the academic mind.

Let’s speed the decline–NO MORE STUDENT VISAS FOR COMMUNIST CHINA SPIES

notamemberofanyorganizedpolicital | June 19, 2020 at 1:23 pm

Education will be the sector of the economy hardest hit by an extended lockdown in the face of the coronavirus pandemic, according to new analysis.

The impact on education is forecast to be greater even than that on the hospitality industry, which has been almost entirely closed down by efforts to contain the spread of the virus.

Universities will bear the brunt of the loss, as their income from tuition fees plunges and international students stay away.

https://www.forbes.com/sites/nickmorrison/2020/04/15/education-will-be-hit-harder-than-hospitality-as-coronavirus-lockdown-devastates-economy/amp/

Watching the 60s/70s leadership of academia get decimated because of what those old hippies taught the mush-filled heads of the last two generations of kids is bizarrely poetic. Joined by the BLM anarchists, they destroy their own infrastructure – wealth producing businesses in urban areas, along with student-loan dollars.
Arson isn’t a good look. Giving in to arson is worse. Blue state Democrats totally own this political, actual bonfire & richly deserve all it’s consequences.

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