The outbreak of the coronavirus has become a major disruption to colleges and universities across the country, with most institutions canceling in-person classes and moving to online-only instruction. The pandemic also threatens to significantly alter nearly every aspect of college life, from admissions and enrollment to collegiate athletics. These concerns extend to the financial future of higher education institutions in a time of considerable financial instability, both in the form of unexpected costs and potential reductions in revenue.
As the situation continues to develop, legislators are taking an active role in addressing both the immediate and long-term challenges related to the outbreak. As many colleges close on-campus housing and dining, legislators have introduced bills to ensure students receive refunds for room and board expenses. Other states are considering bills that would pause the collection of payments on state held student loans. Pending legislation also requires higher education institutions to develop and expand emergency preparedness and response plans. Legislators are also exploring strategies to address funding and appropriations for public colleges and universities.
Challenges and Policy Issues
Closures and Learning Disruption
The spring semester of 2020 was significantly disrupted by the spread of the coronavirus as more than 1,300 colleges and universities in all 50 states canceled in-person classes or shifted to online-only instruction. By fall, many campuses developed plans to merge in-person instruction (with social distancing) and online learning, with varying degrees of success by institution. According to tracking from the College Crisis Initiative, 44% of institutions developed fully or primarily online instruction, 21% used a hybrid model and 27% offered fully or primarily in-person instruction.
Many institutions are planning to expand in-person instruction and housing in spring 2021 with hopes that strategies including increased testing, contact tracing, and wastewater surveillance will help reduce campus outbreaks. Most schools are planning to cancel spring breaks or move to remote instruction after the break, which has prompted some concern about academic success and mental health. A recent survey found that nearly half of currently enrolled students said that it is likely or very likely that COVID-19 will negatively impact their ability to complete their degree or credential.
Online Instruction and Learning Disruptions
The move to online-only classes for instruction prompted concerns about the quality of educational instruction provided remotely. Previous studies have warned that student performance, particularly for students who are already academically struggling, can seriously suffer in online courses. Other research has found that up to 20% of college students have issues accessing effective technology including working laptops and reliable high-speed internet.
Some colleges announced plans to help students who might lack access to an internet connection, including opening university libraries on a limited basis and distributing mobile hotspots to students. Many schools also shifted to pass/fail grading system instead of standard letter grades. While this transition could help students in the short-term, switching courses to pass/fail could create potential complications for student credit transfer and graduate schools.
Admissions and Enrollment
Since the start of the pandemic, concerns over postsecondary enrollment have been prominent for postsecondary institutions. Due to restrictions, campus visits and admissions testing were both significantly disrupted in the late spring. More than 300 schools extended admissions deadline in hopes of giving students more time to decide and many schools waived SAT/ACT requirements.
Despite these adjustments, freshman enrollment in fall 2020 declined by an unprecedented 13.1%. This led to an overall postsecondary enrollment dip of 2.5% according to the most recent data from the National Student Clearinghouse. Enrollment declines vary by institution, but public 2-year institutions have generally seen the largest declines in first-time student enrollment (-21.0%) followed by public colleges and universities (-8.1%). New international student enrollment dropped by 43%.
Recent preliminary data found that new undergraduate enrollment is down 4.5% in spring 2021.
Institutional Financial Challenges
Campus closures and the move to online learning caused colleges and universities to face a number of unexpected expenses from the outbreak. These expenses included: refunds issued to students for room and board, increased cleaning operation costs, and growing technology costs from moving courses online. Due to these expenses, several colleges and universities have announced hiring freezes for faculty and pay cuts or furloughs for staff. Concerns about adjunct and part-time faculty, who make up more than 40% of faculty nationwide, have also emerged. Nearly all adjunct faculty lack paid sick leave and few receive health insurance from their college.
Amidst declining enrollment, public institutions must also navigate likely declines in state funding. The immediate economic impact of the pandemic forced several states to reduce funding for higher education institutions in this fiscal year and several other states relied on federal CARES Act funding to avoid larger cuts. With the outlook for additional federal aid uncertain, larger cuts are possible in many states.
Student Financial Aid and Affordability
Disruption caused by the pandemic has impacted both existing students as well as graduating high school senior’s ability to receive and manage financial aid. The Department of Education has compiled guidance and FAQ about federal student aid programs and what flexibility might be available to support students and institutions.
Several states have issued revised guidance regarding scholarship eligibility and requirements that may need changes due to the pandemic. Missouri and West Virginia provided guidance and increased flexibility from state agencies. While Louisiana, Minnesota and Tennessee passed legislation that allows for modifications and waivers for state financial aid programs.
Through executive actions taken by both former President Donald Trump and President Joe Biden, as well as the Coronavirus Aid, Relief and Economic Security (CARES) Act and the COVID-19 Economic Relief Bill passed in December 2020, the federal government has provided significant, temporary relief for most student loan borrowers. The following provisions remain in place:
- Payments are deferred and interest is waived until Sept. 30, 2021.
- Collection actions and penalties are suspended until Sept. 30, 2021.
- Companies can pay up to $5,250 of employee’s student loan payments on a tax-free basis through Dec. 31, 2025.
- Requirements that force students to repay loans if they withdraw from courses are waived during the COVID-19 emergency.
For more information about the federal provisions related to student loan relief, visit this page.
Several states have also taken action to provide additional relief to borrowers who may not be eligible for the federal relief measures. Nine states and the District of Columbia reached an agreement with private loan servicers to provide loan relief and at least six states have introduced legislation to address student loan borrowing or debt collection.
The closure of campuses and modified learning environments meant many changes to campus work-study jobs. Roughly 700,000 undergraduate students receive Federal Work-Study subsidies that provide an average yearly award of $1,759 to students. For the spring semester, the Department of Education issued guidance to allow institutions to continue paying students Federal Work-Study wages. Some states, such as Texas also issued guidance to waive regulations to allow students to continue receiving funding for work-study jobs. However, in the fall, many institutions reduced or limited the number of work-study jobs due to campus closures and gathering restrictions.
Student Supports and Resources
Campus Housing and Dining
Campus closures and limits on in-person gatherings have created significant challenges for students. Many students rely on college housing, dining halls, and other campus resources for support while in school. Abrupt campus closures also create unplanned financial burdens for students who need to leave on short notice. While several colleges have created emergency relief funds and others have offered refunds for students’ room and board. Tuition refunds have not been offered at most schools, but some did reduce tuition (generally between 10-20%) in efforts to boost enrollment in 2021.
Students Abroad and International Students
According to the Institute for International Education, there were more than 1 million international students studying in the U.S. in 2019, an all-time high. International students make up about 6% of the total higher education student population and research finds these students bring engagement benefits for domestic students while providing a key source of revenue for institutions.
However, disruptions from the pandemic and subsequent limitations on travel have significantly reduced international student enrollment. A recent survey found that new international student enrollment dropped by 43% and overall international student enrollment is down 16% in Fall 2020. A report from the NAFSA: Association of International Educators estimates that institutions will lose at least $3 billion due to international student enrollment declines in fall 2020. Additionally, most universities have shut down their study abroad programs and canceled school-sanctioned travel.
Federal guidance for international student enrollment currently remains the same for spring 2020. Under these rules, new international students are only permitted to register for hybrid or in-person learning courses, not full online options. Students who were enrolled prior to the pandemic may remain enrolled, even if the institution moves to fully online education.
The pandemic continues to disrupt college athletics, even as some sports attempt to play through seasons amid frequent cancellations. The NCAA provides updates and guidance to institutions, but many cancellation rules are decided by athletic conferences or institutions. The combined impact of limited or no in-person fans, as well as the cancellations of lucrative tournaments and games, leaves college athletics facing serious revenue impacts.
Due to the spring cancellation of the men’s and women’s basketball tournaments, the NCAA announced that it will cut distributions to Division I schools by up to $375 million due to the cancellations of the tournaments. This reduction in revenue has led to some schools announcing cuts to athletic programs. According to a survey from NBC News, 26 colleges and universities have cut more than 90 sports programs.