Some Colleges Facing Extreme Financial Hurdles during Shutdown

By Andreas Fanos on June 1, 2020

Many colleges are facing questions about what to do for the next semester, but also, how to even stay afloat with refunding students for the current year. Universities credited some sort of portion towards dorming, tuition, and campus-related fees. The issue is many have faced extreme financial losses as a result of the crippling coronavirus. A lot has been put on hold as a result of the virus, and many universities are grappling with what to do in the near future.

For example, an article from NJ.com summarizes a university like Rowan U., who has lost $33 million due to the coronavirus pandemic. The deficit was caused by a combination of crediting for room and board along with a drop in state funding, according to the president of the university in Ali A. Houshmand. He also confirms much has been halted such as hiring and expenses. Other New Jersey schools are facing an equal predicament where some could lay off employees and eliminate programs.

Another article from Wbur.org goes as far as stating many small liberal art colleges could face closure for good. A college named MacMurray College in Illinois had to close as a result of crippling financial hardship. The president confirms the virus is not the sole culprit for the closing, but it did accelerate the process.

Some factors that have hurt colleges are a drop in enrollment, competition from other universities, lack of state funding, and endowment issues. Many small colleges face competition from bigger schools with more resources. A senior writer at Chronicle of Higher Education named Scott Carlson predicts more small colleges will close. He agrees that small colleges rely on tuition and room and board for staying afloat, and due to the virus, students can not use them and have been credited with their money. If students can not return for the upcoming fall semester, colleges will lose even more profits. A dorm and meal plan cost a lot of money when going away to a college or attending one in a hometown.

Photo credit to Pixabay from Pexels site

An article from CNBC relays the same kind of concerns when it comes to universities thriving economically. A decrease in state funding, lower enrollment, and a lack of summer programs have crippled universities’ wallets. Some students can choose to skip college altogether with mounting costs and a decrease in the number of available jobs. The future certainly looks different in the future because of the coronavirus.

Colleges are slowly realizing how important the students are to their success. Due to the expensive costs of attending school, students can make the decision to take a break from school and learn valuable skills online. They can also take fewer classes since content could remain online in the future. However, others have the opinion that online learning is not the same as in-class instruction and that the current costs are too high. Surveys confirm students will drop out of college and take a break, hurting universities even more financially. Many could stay at home and wait it out or work at places that are open to make money, depending on the state they live in since restrictions vary from state to state.

Some colleges are turning to freeze tuition to keep students enrolled and have new students sign up. But, many colleges could close their doors in the coming months due to their current situation.

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