US colleges face an uncertain future amid a coronavirus pandemic


The past few years have been turbulent for many colleges in the United States as student enrollment has decreased, foundations have shrunk, and many private institutions are increasingly dependent on tuition fees to survive. Many college graduates are now concerned that the unprecedented combination of difficulties that the coronavirus pandemic could cause could result in a fatal blow.

“The pandemic has changed almost every aspect of our business, from teaching and student life to research and athletics to approvals and attitudes to the financial model that supports all of this,” said Michael Schoenfeld, vice president of public affairs and government relations, and chief communications officer at Duke University, CBS News tells. “This is all happening in real time, so it will be a while before we can fully assess the impact on the entire institution and even higher education. In the short term, we are reviewing a number of options for the coming academic year, both health and also depends on political considerations. We are also examining the long-term effects and opportunities, which will also be significant. ”

A breathtaking 6.6 million Americans looked for unemployment benefits last week, which means that around 10% of the country is now unemployed. Oxford Economics expects the crisis to worsen as the weeks of coronavirus shutdown drag on and up to 30 million US jobs are lost – three times as much as a result of the real estate crash in 2008.

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“Families will have less money. Many of them will be out of work for a while. You know, if they need investment, they have less investment,” said Dr. Thomas Bailey, President of Teachers College at Columbia University.

And he said this could be a very real problem for colleges and universities across the country that are “very tuition-dependent and not particularly selective.”

“If you look at the industry press in recent years, you read regularly about closed institutions,” he said. “I think the elite, well-funded and respected institutions will be able to survive this. But many colleges and universities – small, private, less selective institutions – have already been under a lot of stress. I think it will just be so much more difficult. ”

To make matters worse, current social distancing and quarantine policies make it impossible for students to attend campus or attend events for admitted students, which often helps sell a university to its future classes.

“It will definitely have an impact,” says Dr. Linda LeMura, president of Le Moyne College private New York Jesuit institution, told CBS News. “When students come to campus in our situation and feel the strength of the community, the friendliness of the community, the accessibility of the professors, they get a feeling, a mood and say to themselves: ‘I can see myself here.’ It’s very different when you sell your college in an online or virtual environment, it doesn’t affect the senses in the same way. “

University of Washington students are on March 6, 2020 for the last day of personal class on the campus in Seattle, Washington. The university will be closed as of Monday, March 9, as a precaution against the outbreak of the novel coronavirus COVID-19 for the rest of the winter quarter. The student in the gas mask said he was wearing it because all the regular masks were sold out.

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When asked if she thought the freshman class would be as full as usual next year, LeMura replied gravely, “Not me. Not me.”

“I want to be wrong in the worst way, but I really think that the modeling that we all use is completely wrong now,” she continued. “Because we didn’t expect a pandemic at the start of the recruitment season. We don’t know how this will affect family behavior and family finances. Recruiting outside your region may be restricted because families want to keep your children closer to home. All these things are now unknown. While we could have predicted a class with a variable of approximately 25 students, we could consider a difference of 200 students. We just don’t know. “

Regardless of the size of the facility or whether it is a public or a private facility, the foundations have declined across the board due to the recent turmoil in the stock markets, which further burdens the schools’ operating budgets. Most development agencies have temporarily stopped asking alumni for donations. And to make matters worse, events such as reunions, which usually play a key role in inspiring donations, have been canceled.

“We rely heavily on the type of relationships in residential areas,” LeMura told CBS News. “Bringing people back to campus and meeting the moods with the next generation of students is the impetus to generate gifts and philanthropy. Without a doubt, the more distance we have, the more difficult it is. It can be done, however it’s just an enormous challenge. The whole company, really on a campus like ours, is based on the ability to connect from person to person, and the online environment and the cancellation of such events have a negative impact. “

This is a conclusion that has already been affected by the reimbursement of meal plans and room and board that most schools had to undertake when COVID-19 required the early closure of locations across the country this spring semester.

“No question about it,” said LeMura. “Most institutions have reimbursed room and board at a prorated price, which will affect the bottom line of this academic year, whether we end the year with a margin or a deficit or not, and then if we go forward. ” If the campus has to open later in the fall, it will be another revenue success, not to mention changing the way a cohort model is developed that is so effective on residential sites. All of these things together really mean a big disturbance. “

College students are expected to leave campus to combat the spread of coronavirus
On March 12, 2020, students moved out of the Harvard Yard dormitories on Harvard University campus in Cambridge, Massachusetts. Due to the risk of coronavirus (COVID-19), students were asked to move out of their dormitories by March 15. All classes will be postponed online for the rest of the spring semester.

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Public institutions are also not immune. Penn State, which has committed to paying all of its employees by April and to set up an emergency fund for its worst-hit students, emailed CBS News that it would freeze the job and terminate a number of service contracts have to contain financial losses.

“Penn State has suffered significant financial losses from aid and other entities that rely on self-generated income to finance their operations,” the statement said. “These activities include Penn State’s two hotel and conference centers, the university airport, and accommodation and meals in the university’s extensive dormitories, which typically care for about 20,000 students a day. The total loss of revenue at the university will continue until the spring semester estimated to be well over $ 100 million. “

Higher education is usually counter-cyclical, so its prospects in an inner city do not necessarily move in the same direction as those in the rest of the economy. The question is whether the current global situation is so unique that it contradicts previous behavior models.

“It’s possible that students say, ‘You know, I really want to have this experience in class, so let me wait a year,'” says Bailey. “On the other hand, higher education is countercyclical. There has been a huge increase in enrollments after the recession 12 years ago. So it is possible that someone who is temporarily unemployed may say, ‘Okay, this is a time for me back in the school to take some courses, maybe to get an additional degree that I can use. ‘But the problem with that, of course, is that people may not have the money to pay for it. If you have a recession, that could lead to 7 or 8% unemployment, that could work. If we have a much higher unemployment rate, I’m not sure that this countercyclical argument works. ”

LeMura believes that this recession will hit higher education more than the last one.

“I think there will be more pressure to charge significantly less for online education,” she said. “And let’s face it. Institutions in the past, I don’t know, 200 years have invested heavily in physical infrastructure, so now you will have the overhead of all those buildings that are under capacity on the balance sheet. And that’s a tough job for any institution. “

It is also unclear how the coronavirus pandemic affects universities’ ability to enroll international students who often pay higher tuition fees than their domestic counterparts. Despite travel restrictions, Annelise Riles, executive director of the Buffett Institute for Global Affairs at Northwestern University, told CBS News that the office for international student and science services in the northwest continues to “process immigration documents” (I-20 and DS 2019). Requests so that international students who are about to start programs in the northwest can be as well prepared as possible for any scenario in these uncertain times. “

Last month, Moody’s Investors Service downgraded higher education credit prospects from stable to negative, pointing to the “unprecedented insecurity in enrollment” that colleges and universities will face in the coming fiscal year.

Given the uncertain future of many US academic institutions, Bailey warned that a blow to higher education would affect society as a whole.

“Higher education is absolutely crucial. It provides a basis for so much that we can rely on in society. It not only promotes society technologically, culturally and scientifically, but also offers low-income students the opportunity to live a better life to develop more opportunities, “he said. “Science, culture, justice are fundamental things that we want to develop in higher education. And if we only try to stay afloat, we won’t pursue these goals so effectively.”

There are simply some intangible losses that cannot be accounted for.

“I think the future of the nation’s soul is at stake,” LeMura told CBS News. “The type of educational experience we have in the United States is such a diverse ecosystem that we will never be the same to let many of these schools die.”