For years, Claire McCarville dreamed of going to college in New York or Los Angeles, and was thrilled last month to get accepted to selective schools in both places. But earlier this month, she sent a $300 deposit to Arizona State University, a 15-minute drive from her home in Phoenix. “It made more sense,” she said, “in light of the virus.”
Across the country, students like Ms. McCarville are rethinking their choices in a world altered by the pandemic. And universities, concerned about the potential for shrinking enrollment and lost revenue, are making a wave of decisions in response that could profoundly alter the landscape of higher education for years to come.
Lucrative spring sports seasons have been canceled, room and board payments have been refunded, and students at some schools are demanding hefty tuition discounts for what they see as a lost spring term. Other revenue sources like study abroad programs and campus bookstores have dried up, and federal research funding is threatened.
Already, colleges have seen their endowments weakened, and worry that fund-raising efforts will founder even as many families need more financial aid. They also expect to lose international students, especially from Asia, because of travel restrictions and concerns about studying abroad. Foreign students, usually paying full tuition, represent a significant revenue source everywhere, from the Ivy League to community colleges.
Some institutions are projecting $100 million losses for the spring, and many are now bracing for an even bigger financial hit in the fall, when some are planning for the possibility of having to continue remote classes.
Administrators anticipate that students grappling with the financial and psychological impacts of the virus could choose to stay closer to home, go to less expensive schools, take a year off or not go to college at all. A higher education trade group has predicted a 15 percent drop in enrollment nationwide, amounting to a $23 billion revenue loss.
“The combination of fear for health and safety and the economic impact at the same time is one that I haven’t experienced, and I don’t think most university leaders have,” said Kent D. Syverud, the chancellor of Syracuse University.
“Will families choose to send their kids to college?” he wondered. “Will they choose to not send them or delay them? I just haven’t found anybody who has the best crystal ball to answer it.”
The coronavirus forced campuses to shut down at a time when higher education, which employs nearly four million people across the country, was already facing major challenges. Population declines are expected to reduce enrollment, even as skyrocketing tuition and student debt have led to questions about whether a college education is worth the cost.
In mid-March, Moody’s Investors Service downgraded the outlook for higher education from stable to negative, predicting that institutions with strong endowments and cash flow, like Harvard or Stanford, would weather the virus, while smaller ones would not.
But even wealthy universities have begun announcing austerity measures. Robert Zimmer, president of the University of Chicago, said in an April 7 email to staff that to buffer its losses, the university would freeze salaries, slow academic hiring, suspend discretionary spending and look for other budget cuts. The University of Pennsylvania announced similar measures, including a hiring freeze and a pause in new capital projects, on Monday.
“I think it’s a greater systemic shock” than either the financial crisis of 2008 or the terrorist attacks of 2001, said Susan Fitzgerald, a Moody’s analyst. “We don’t know how long it’s going to go on or the multiple impacts.”
Colby College, a liberal arts school in Maine, has taken a typical blow. Its endowment, a rainy-day fund that can also serve as a proxy for a college’s financial health, dropped to $770 million earlier this month from $900 million at the end of last year. (It has since partially rebounded to $803 million.) And like many colleges, Colby has had to refund room and board for students asked to leave campus.
It has been able to balance its budget through a hiring freeze and savings on travel and events. But, said David Greene, Colby’s president, “in the long run, that is not a winning strategy.”
Like other administrators, Mr. Greene is hoping to reopen with classes on campus, rather than online, even if it means deferring the start of the fall semester. “Our whole model of education and all of its power comes from close human interaction,” he said.
But he can only delay so long. “If we had to start in October instead of September, that is not a real problem for us,” he said. “If we had to start in November instead of September, that’s probably not a real problem. What if we started in January and went through August? That would be a very different kind of problem.”
Although Congress provided $14 billion for higher education in the $2 trillion rescue bill signed by President Trump last month, a large chunk of that, $6 billion, was in the form of emergency cash grants for students in financial distress.
The rest of the bailout amounts to just 1 percent of total university expenses. College presidents say that won’t be enough to protect some institutions from slashing staff and programs, cutting back scholarships or perhaps even going under. They are asking for at least $46.6 billion in aid, to be divided equally between institutions and students, in the next stimulus package.
There are some 4,000 two-year and four-year public and private colleges and universities in the United States, educating roughly 20 million students. They generated about $650 billion in revenues in 2016-17, and in some states, like California, Iowa and Maryland, they are the largest employers, according to the American Council on Education, a trade group.
The council predicted in an April 9 letter to House Speaker Nancy Pelosi that college enrollment for the next academic year would drop by 15 percent, including 25 percent for international students from countries like China who often pay full tuition, helping universities meet their budgets and afford financial aid for Americans.
“The pandemic is striking during the height of the admissions process,” the letter said. “College and university leaders are fully expecting significant, potentially unparalleled, declines in enrollment, both from students who do not come back, and those who will never start.”
The spring is prime testing season for juniors applying to college in the fall. But dates for the SAT and ACT have been canceled, and Advanced Placement subject tests have been truncated.
In light of the turmoil caused by the pandemic, a growing number of schools, from the small but elite Williams College in Williamstown, Mass., to the massive University of California system, are suspending the requirement that students take the SAT or ACT test for admission, accelerating a national trend of making the tests optional.
David Coleman, the president of the College Board, which administers the SAT, said last week that he was preparing for “an at-home style solution” for testing if the national shutdowns continue, and the organization plans to make an announcement on Wednesday about the future of the SAT.
Many current students are dissatisfied with how the virus has changed the nature of college. To some, online classes and closed student centers, gyms and science labs don’t seem worth the high prices they’re paying. At places like the University of Chicago and Iowa State, students are petitioning their schools to cut tuition by as much as 50 percent for as long as the pandemic lasts.
So far, universities have resisted, saying they will try to increase financial aid instead — although declining endowments and donations could make that difficult. The University of Chicago announced Monday that it would keep tuition, housing and fees flat.
For most universities, the question of how prospective students will react remains the great unknown. Already, many colleges have moved the deadline for students to accept admission from May 1 to June 1. And some schools are considering whether they will need to push that even further.
Orientation day, said Richard Ekman, president of the Council of Independent Colleges, “is probably the first time you’re going to know who’s really going to show up. Then you’ve got to scramble to add faculty or fire faculty or shift faculty. A lot of things that would have been done in a considered way will now in all likelihood be done at the last minute.”
One group of students that could see a silver lining, said Hafeez Lakhani, a college admissions coach, is high school juniors. Despite disruptions to testing and the admissions process, it could be easier for them to get into their stretch schools or off the wait list if overall enrollment declines — especially for those who can afford to pay full tuition, if fewer international students apply to U.S. schools.
Small institutions like Hampshire College in Amherst, Mass., are more vulnerable to financial setbacks than big ones. Hampshire’s president, Ed Wingenbach, has put together a working group that is considering shorter units of study that would allow students to cycle in and out of remote learning if the virus comes and goes.
“If we’re looking at remote learning in the fall,” he said, “I think it’s more likely students will take a gap year or semester, and that will have a different impact on revenue.”
Ms. McCarville, the student in Phoenix, said the coronavirus had made her more sensitive to price over marquee names, and to the value of being close to her family. Although her dream schools, Skidmore in Saratoga Springs, N.Y., and Loyola Marymount in Los Angeles, offered her scholarships, tuition at Arizona State was cheaper, and the overall package was better.
In the past, that might not have mattered to her. But after the coronavirus, it does.
“I would rather go to the least expensive school possible,” Ms. McCarville said, “just so I minimize my debt when I enter the work force, and I’m not in over my head in a very uncertain situation.”
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