Most campuses in the United States are sitting empty. Courses are online, students are at home. And administrators are trying to figure out how to make the finances of that work.
“The math is not pretty,” says Robert Kelchen, who studies higher ed finance at Seton Hall University in New Jersey. “Colleges are stressed both on the revenue side and on the expenditure side.”
On one end of the equation, colleges are spending money to take classes online, in some situations purchasing software, training professors or outsourcing to online-only institutions. That’s on top of refunds for room and board and parts of tuition. On the other side, money isn’t coming back in, in the form of expected tuition and revenue from events such as athletics, conferences on campus and summer camps. College endowments, which can sometimes offer some insulation from hard financial times, have also taken a hit.
“This will touch every sector of higher education. Every size of institution, every region of the country,” says Dominique Baker, a professor of education policy at Southern Methodist University in Dallas.
And it already has. The University of Michigan estimates it may lose up to $1 billion by the end of the year. For the University of Kentucky, it’s $70 million. Hundreds of schools — including some with endowments of more than a billion dollars, like Duke University, Virginia Tech and Brown — have announced hiring freezes. Other institutions have cut pay and have laid off staff and contractors. In Vermont, state officials have floated potential college shutdowns.