How the Pandemic is Causing Colleges to Change Their Spending

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How the Pandemic is Causing Colleges to Change Their Spending

Published on May 19, 2020

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Colleges, like people, have radically changed their spending since the pandemic began.

Expenses that were once the norm have given way to new, unexpected costs. How will it all shake out?

Like everything else about the pandemic, that remains to be seen.

But here are some steps schools have taken, as well as suggestions about how they might do more. 


College Spending: Cutting and Pasting

The Reality

Campus operations have largely shut down with buildings and offices shuttered, utilities no longer needed, and events large and small cancelled, including sports and graduation.

Recruitment trips in the U.S. and abroad have come to a halt, many programs (especially sports), have been cut, and announcements of furloughs and layoffs make the news, seemingly daily.

According to The Chronicle of Higher Education, in May the U.S. Bureau of Labor Statistics estimated that “19,200 fewer workers were employed by colleges and universities in March 2020 (including junior colleges) than in February 2020.” 

So wouldn’t all these things add up to big savings for schools? In the short run, yes. But not in the long run, schools say, when you factor in the unexpected costs associated with changing everything about how they run the school, and educate students. Then there’s also the big issue: reimbursing room and board.  

Jim Hundrieser, vice president for consulting services at the National Association of College and University Business Officers (NACUBO), recently discussed the financial effect of the pandemic on schools with Education Dive.

“The costs are just massive,” he said. “You might save some dollars here or there but it’s never going to be enough.”

Quick Fix?

Experts agree that when you take away the costs of supplying services on campus, there’s an opportunity to refocus more on student needs using the new digital infrastructure in an innovative, technologically driven way.

Online counseling, for example, could be offered.

This would allow more people to get help, with less wait time and less stigma, since nobody will see you walk into a building.

Online labs could also be created, which would allow more students to access them.

Another approach, said Robert Lue, the faculty director of Harvard University’s Derek Bok Center for Teaching and Learning, in the same Education Dive interview, is the development of digital course materials.

This would give students more flexibility and might one day be packaged for online courses, perhaps on a subscription basis, in partnership with publishers

There is some financial aid available. Congress previously designated around $14 billion for higher education in a package that was supposed to help with coronavirus-related expenses, but there were strict guidelines.

And a new coronavirus relief bill was passed recently by the House of Representatives, though it stands little chance of approval by the Senate.

It includes $100 billion for K-12 and higher education. 


Students Weigh In

So where can schools find areas to cut, then add those savings to other places?

In a recent story by the Wall Street Journal, college students weighed in.

Here are some highlights: 

“They could start by reducing the large number of administrators who have been hired to fill the ever-growing departments of student services. Ranging from resort-style leisure operators to thought-police units, these departments have created an increasingly sheltered campus environment that distorts the college experience in addition to jacking up the cost. Schools could also shrink or eliminate some of the newer disciplines that do more to radicalize young minds than provide marketable skills that students can use to recoup the cost of tuition.”

—Jack Chapman, University of Texas at Austin, finance and government

“Many universities need not look far to find the funds they desperately seek. The 100 wealthiest universities in the U.S. sit comfortably on endowments exceeding $1 billion each. For these institutions, there is little need to call in Sherlock and Watson, much less a ‘pandemic committee,’ to unearth the savings to withstand a semester or two of declining revenues. Nevertheless, schools send coy emails urging donations from students and families whose primary concern is the safety of their loved ones.” 

—Nathan Gerevits, New York University, finance

“They can begin by rolling back decades of costly administrative expansion and replacing it with greater levels of faculty governance and student independence.”

—John DiGravio, Williams College, history

“While top-tier facilities serve as a great marketing tool for admissions, colleges should shift their attention to projects that make their institutions a wise investment for potential students. Academic rigor, quality of faculty and departmental funding should be prioritized over cutting-edge add-ons that will contribute nothing to a student’s education.”

—Bill Phillips, Hillsdale College, history

“One way for colleges to raise capital would be to allow future tuition, room-and-board and meal-plan payments to be paid in advance, at a discount. Parents, students and even scholarship donors who can afford to pay right now for future semesters could be allowed to do so and then save some money later. This may be especially beneficial to students who take out loans, since they would face a lighter burden after graduation.” 

—Carlos Garcia Perez, Harvard University, economics and government


It’s clear that schools are in the early stages of coping with this crisis.

But as ideas are generated and implemented, we’ll get closer to a model that will allow students and schools to effectively move forward with higher learning. 





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