Pandemic is walloping higher ed at the worst moment
APRIL, TRADITIONALLY A time of excitement and possibility in higher education, is instead proving to be the cruelest month for US colleges and universities.
High school seniors normally would be weighing their options after receiving college admission decisions, while campuses buzz with visits from excited would-be students. Instead, prospective freshmen are wondering whether their first year in college would begin on a laptop in their childhood bedroom, while schools are scrambling to develop contingency plans for an uncertain future filled with economic peril and, for some, threats to their very survival.
As the coronavirus pandemic lays waste to broad swaths of the economy, higher education is poised to take a particularly hard hit, with colleges and universities that were already feeling the strain of shaky finances now bracing for what some think could be a significant shakeout.
For Massachusetts, a higher education mecca with 114 colleges and universities and more than 425,000 students, the stakes are especially high.
Campuses that suddenly emptied and moved spring semester classes online are now trying to figure out whether they’ll be able to welcome students in person when September arrives or be starting the new academic year with Zoom classes and shuttered buildings.
“Higher ed has had to do something it’s not necessarily known for, and that’s be nimble and prepare for all scenarios,” said Marty Meehan, president of the University of Massachusetts, which enrolls 75,000 students across its five campuses.
“We need to hope for the best and plan for the worst,” said Marisa Kelly, president of Suffolk University. The downtown Boston campus, with an undergraduate enrollment of 5,000 and 2,300 students in graduate programs or its law school, is planning for “the full range of possibilities,” Kelly said, from fully online to fully on campus and “a range of possibilities in between.”
Like a number of schools, Suffolk has extended its deadline for admitted students to commit and send a deposit from May 1 to June 1. But that still may force high school seniors to make a decision before they know whether they’ll be heading to a campus dorm or not.
As a result, higher education experts and college consultants say lots of students are considering taking a gap year and planning on beginning college next year.
“We’ve seen a tremendous number saying, with all this uncertainty, we’re just going to wait it out a year,” said Nick Ducoff, CEO of Edmit, a Boston company that provides consulting to families on college costs and financing.
In late March, Edmit surveyed 100 current clients to gauge how the coronavirus pandemic is affecting college plans. Three quarters of families said it is causing them to rethink what they’ll do, and nearly one quarter of families said their child is now considering taking a gap year.
In a poll of 487 college-bound seniors conducted in mid-March by Art & Science Group, a Baltimore-based consulting and research firm, 17 percent said their college plans had changed, and nearly two-thirds said they’re rethinking whether they’ll attend their first choice school, with many citing financial concerns.
Michael Horn, a higher education expert based in Boston, said colleges’ success at rolling out virtual classes has been uneven, and not particularly well received. “There’s certainly a lot of students and professors looking at this experience and saying, if this is what online learning is, I don’t want to keep doing it,” he said. Horn said it’s hard to imagine colleges being able to charge full tuition rates for an all-online fall semester. “For those who pay for a residential school, there’s a lot more that goes into it,” he said of all the other aspects of a college experience.
Between lowered enrollment and a possible discounting of tuition if fall classes begin online, Ducoff thinks many schools could see a 20 percent drop in revenue. “That would be just devastating to most colleges,” said Ducoff.
The crisis comes at a time when US colleges and universities are already struggling with a demographic decline in US high school students, financial instability, and growing unease about student loan debt.
“Somewhere between 10 and 20 percent of colleges already were really on the ropes in terms of being able to bring in enough revenue,” said Sean Gallagher, executive director of Northeastern University’s Center for the Future of Higher Education and Talent Strategy.
Horn has been predicting a major consolidation of the US higher education market. Together with late Harvard Business School professor Clay Christensen, he has projected anywhere from 25 percent to 50 percent of US colleges and universities could go under over the next 10 to 15 years. “I think it’ll accelerate trends that we said were already in the making,” said Horn. “And I think it will push more of these to be closures rather than mergers.”
Still, Horn conceded that it’s difficult to gauge exactly how the crisis will affect higher education. “We didn’t model a pandemic,” he said of his work with Christensen.
Gallagher said the decision to shut down huge parts of the economy because of the coronavirus, along with the social distancing strictures it has imposed on every facet of life, including higher education, makes it hard to use previous downturns as points of reference. “Historically, higher ed enrollment has been countercyclical: When the job market is poor, more people look at enrolling in higher ed,” he said. People often view recessions as a time “to upskill,” said Gallagher. “But all of those assumptions have gone out the window.”
The economic role of higher education in Massachusetts is enormous. A recent analysis concluded the UMass system alone, the state’s third largest employer with a workforce of 18,000, has an economic impact of $7.5 billion a year. The university has seen a revenue loss of $123 million since the crisis hit, much of it from refunding room and board charges as students were sent home for the remainder of the semester. Some of that will be offset by $40 to $45 million the system expects to receive from the federal CARES Act assistance to higher education, said Meehan, the UMass president.
Meehan said he’s not only concerned about the university’s financial health but also that of its students, who are likely to need more financial aid at time when the ability of UMass to provide more help is under severe strain.
“Students in many instances have lost jobs, their parents have lost jobs,” he said. “It’s just a challenging time all around.”
Meehan has been in regular contact with Gov. Charlie Baker and state education leaders as well as members of the state’s congressional delegation as the crisis has unfolded. Meanwhile, Baker held a conference call Thursday morning with presidents of about 15 of the state’s major private universities to talk about their planning for the fall and the eventual reopening of campuses.
Massachusetts colleges and universities have all adopted the same stance at this point: They are hoping to be able to welcome students to campus in the fall, but are making contingency plans for how to proceed if that’s not possible.
One huge question looming over university planning is whether foreign students will all be granted visas to enter the US. Boston area schools enroll tens of thousands of foreign students, with Northeastern University ranked third in the country, behind New York University and the University of Southern California, with 16,075 foreign students enrolled in the 2018-19 academic year. Northeastern has the benefit of several regional campus in the US and abroad, and it is considering whether its London campus could be a temporary option for foreign students who aren’t able to get to Boston by September.
Suffolk also has sizable foreign student population – 20 percent of its undergraduates. “It’s a concern, and one we’re planning for,” Kelly, the university president, said about the possibility of restrictions on foreign student entry.
Kelly said the university, which has an endowment of $249 million, is in a strong financial position to weather the coronavirus storm, with a good deal of financial liquidity that provides “some cushion that not every institution will necessarily enjoy.”
One Massachusetts school without much cushion is Hampshire College, where president Ed Wingenbach is reckoning with the pandemic on top of the daunting rescue mission he was hired to carry out. Wingenbach arrived at the Amherst campus last summer after a backlash forced out Hampshire’s previous president, who had announced that the school was financially unsustainable and would seek a merger.
Wingenbach was hired to chart a path forward for Hampshire to remain an independent liberal arts college. The school, which opened 50 years ago with an emphasis on self-directed learning and interdisciplinary studies, has embarked on a $60 million capital campaign and is working to climb out of a deep enrollment hole after the previous administration put the brakes on admitting a new class this past fall. Hampshire once enrolled about 1,200 students but currently has about half that number.
“In some sense it’s easier for us because we were already facing some significant challenges and having to think carefully about what long-term sustainability looks like,” said Wingenbach. “We know how to manage a crisis.”
He said reimbursing students for room and board for the portion of the current semester that they’ve been gone has cost Hampshire about $1 million. “In the near term it’s hard but it’s not a crippling thing,” he said, adding that about $600,000 will be offset with funding from the federal CARES Act.
The bigger issue, he said, will be enrollment this fall and the fact that the huge economic impact of the pandemic means students are likely to have greater need for financial aid. Hampshire admitted 650 students for coming year, and a normal “yield” — the number who would enroll — is “in the mid 200s,” said Wingenbach. He now thinks that number will be closer to 150. “I suspect there will be a lot of students who take gap years,” he said.
While the coronavirus epidemic has only made the college’s already shaky status more precarious, Wingenbach was not hired to be the voice of gloom. Part of a restructuring aimed at getting Hampshire on solid financial ground involves a doubling down on its longstanding focus on interdisciplinary study, with a particular emphasis now on what Wingenbach calls “the big existential questions that students of this generation face.”
Topics like “global pandemics and climate change can’t be pursued within one narrow major,” Wingenbach said. “Coming out of this,” he said, offering up a glass very much half full, “students are going to be really interested in the kind of liberal arts education we are offering.”