COVID-19 impact on higher education has been saved
COVID-19 impact on higher education
Confronting financial challenges facing colleges and universities
The coronavirus pandemic has upended business as usual for colleges and universities. Not only have campuses shifted to remote learning almost overnight, but institutions are also suddenly grappling with grave financial challenges as the domestic and global economies may now face what looks to be a major recession.¹
- Strategies for tackling the financial challenges facing colleges and universities
- Cash flow
- Higher education’s coming enrollment crunch
- Focus on building long-term trust with current and prospective students
- Get in touch
Hear our leaders discuss the impact of COVID-19 on Higher Education on the Future U Podcast:
Strategies for tackling the financial challenges facing colleges and universities
The most immediate challenge for most institutions involves cash flow. As institutions lose parking fees, dining outlet sales, and other auxiliary revenues, they also face unexpected expenses, including partial refunds on fees, room, and board, and the need to scale virtual engagement modalities. To ensure continuity in the short term, some institutions will likely need to rapidly restructure their operations.
Further compounding the cash flow challenge is the uncertainty surrounding fall enrollment. If students are unable to return to campus this fall, colleges and universities could face unanticipated and historic attrition from students who are either unsatisfied with their distance-learning experience or whose ability to afford tuition in the current economic climate will be inhibited; others may simply decide to stay closer to home in uncertain times. Even well-resourced institutions will find it hard to forecast enrollment for the 2020–21 academic year.2
For institutions that were already financially stressed or operating from a deficit position prior to the pandemic, short-term unanticipated expenses and longer-term enrollment declines will likely threaten their solvency, potentially forcing numerous closures and mergers.
Here we explore some key considerations for colleges and universities as they find their fiscal footing in a very different operating environment in the months ahead.
Higher education’s coming enrollment crunch
Strategies for managing COVID-19’s impact on college and university enrollment
In the wake of the pandemic, most institutions of higher education have shuttered their physical campuses for the academic year and moved their summer sessions online. One of the outstanding questions is how the pandemic and subsequent recession in the United States and globally will affect enrollment for the 2020–2021 academic year and beyond.
For college and university enrollment officials in the United States, the challenges wrought by COVID-19 are many: moving the traditional campus recruiting events to virtual settings, minimizing summer melt among admitted students, dealing with students’ and families’ shifting financial needs, and accurately modeling what enrollment outcomes will look like for the fall term, which, even before COVID-19, was ramping up to be competitive and chaotic due to changes by the National Association for College Admission Counseling on guidelines pertaining to student recruitment.
One of the biggest near-term issues for enrollment managers is the lack of clarity regarding how the next academic year will unfold. Prospects, current students, and families have a long list of questions, none of which have easy or clear answers. With so much in flux, administrators on the front lines face at least two significant challenges. The first challenge is helping their institutions define realistic and achievable enrollment goals for each of the various future state scenarios under consideration. The second challenge involves communications. College and university enrollment leaders and counselors should simultaneously acknowledge the uncertain future while instilling confidence that:
- The institution is prepared for whatever may come
- The characteristics that comprise its unique student experience will not be compromised, no matter what happens with the crisis
- This institution is still the best option for current and prospective students
Addressing these challenges will require unprecedented levels of communication and personalized outreach. While the dynamics of the pandemic and its impacts continue to evolve, there are several approaches and strategies colleges and universities can employ as they contemplate their enrollment strategies for fall and beyond.
1 Christina Capatides, “Colleges across the U.S. brace for impact as the coronavirus batters their already tenuous financial ground,” CBS News, April 10, 2020.
2 Eric Hoover, “How is COVID-19 changing prospective students’ plans? Here’s an early look,” The Chronicle of Higher Education, March 25, 2020.
3 Soo Rin Kim, Olivia Rubin, and Sasha Pezenik, “States look to closed hospitals and college dorms to meet coronavirus demands,” ABC News, March 19, 2020.
4 Caroline Enos, “Universities in Boston area to house health care workers, first responders during the COVID-19 crisis,” The Boston Globe, April 9, 2020.
5 Rachel Gentry, “American Council on Education Simulates Distribution of CARES Act Emergency Funds,” NASFAA, March 30, 2020.
6 Association of Governing Boards, “AGB policy alert: COVID-19 and the CARES Act - Paycheck Protection Program for small colleges, universities, and institutionally related foundations,” April 1, 2020.
7 See, for example, Eric Hoover, “How Is COVID-19 changing prospective students’ plans?”, The Chronicle of Higher Education, March 25, 2020; and Mirka Martel, Ph.D., “COVID-19 effects on U.S. higher education campuses: Academic student mobility to and from China,” Institute of International Education, March 2020.
8 Elissa Nadworny, “Fewer students are going to college. Here’s why that matters,” National Public Radio, December 16, 2019; and Kelsey Gee, “More universities shut down traditional M.B.A. programs as popularity wanes,” The Wall Street Journal, June 5, 2019.