As uncertainty over fall semesters looms, the coronavirus pandemic already has cost Ohio colleges hundreds of millions of dollars, sparking conversations about hiring freezes, possible furloughs and other budget reduction measures.
The COVID-19 crisis has cost Ohio’s 14 public universities between $290 million and $310 million this fiscal year, said Bruce Johnson, president of the Inter-University Council of Ohio, an association of the state’s public universities. That includes a combined $171 million in refunds to students, primarily for room and board costs and some fees. Ramping up of online learning has also accounted for costs.
Colleges and universities are still considering what these financial ramifications will mean for them and how they might respond.
“They’re looking at paring down their staffs first, to respond to what we think is a pretty traumatic new normal,” Johnson said.
There is also lost revenue for such things as renting out campus space for conferences and summer camps, he said.
Ohio State University’s housing, dining and recreational fee refunds totaled more than $35 million, and the university expects continued volatility related to investment returns, Michael Papadakis, senior vice president of business and finance and chief financial officer at OSU, said in a written statement.
For the next fiscal year, Ohio State has asked all colleges and units to prepare three budget scenarios: assuming 5%, 10% and 20% reductions in spending.
“We must prepare for fiscal 2021 based on the possibility of ongoing disruptions while continuing to focus on the university’s core academic mission and placing Ohio State in the best possible position for a future in which the virus is contained,” Papadakis said.
Ohio State has already enacted a hiring freeze, which is expected to save $4 million to $6 million through June 30, and paused certain salary increases, which could save the university $5 million to $10 million. OSU also has paused a number of capital projects.
As the university envisions various budget scenarios, the OSU chapter of American Association of University Professors called last week for transparency in financial planning, with a focus on teaching and research. Members also asked that budget decisions prioritize people such as adjunct faculty and graduate students who aren’t protected by tenure.
“The most vulnerable shouldn’t pay for the budget crisis,” said Pranav Jani, an AAUP board member and an associate professor of English.
Meanwhile, the University of Cincinnati announced earlier this month hiring and salary freezes, spending cuts and pay cuts to the university’s leadership team.
And last week, University of Akron President Gary Miller asked the athletics department and all non-academic administrative divisions to present plans for reducing expenditures by 20%. He also asked university leaders to present a plan to reorganize the academic division and reduce the number of colleges and programs.
Private colleges are also game-planning for financial struggles. Urbana University announced last week that it will close after this semester, due to ongoing enrollment challenges and the effects of the coronavirus pandemic.
C. Todd Jones, president of the Association of Independent Colleges and Universities of Ohio, doesn’t expect more Ohio private colleges to close in the short term, but he said hiring freezes are already in place at many, and other cuts are likely coming.
“As this continues, colleges are having to look at potential furloughs because when you look at what does college cost, colleges costs are driven by people,” Jones said.
Federal relief arrives, but state cuts loom
The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act passed last month included billions in aid for higher education. Ohio institutions received a combined $388 million among its public and private colleges, community colleges, career academies, technical schools, adult education centers and cosmetology schools.
Half of the funds must go to students through emergency grants, while universities may use the other half to cover costs associated with the coronavirus.
For Ohio’s public colleges, the federal aid totaled nearly $200 million, with $100 million going to students for emergency relief. The other nearly $100 million doesn’t cover the full losses that public universities have suffered due to the pandemic, Johnson said.
As the federal aid comes in, Ohio colleges are bracing for cuts at the state level. Gov. Mike DeWine has asked state agencies to prepare to make cuts of up to 20% as state tax revenues fall due to lost jobs and closed businesses.
DeWine has not yet announced details about possible cuts, but Johnson said public colleges are concerned about cuts to the State Share of Instruction, Ohio’s primary mechanism for subsidizing instructional costs.
“We’d be extremely concerned if we lost the already $290 million and then on top of that, the state were forced to cut higher education,” Johnson said.
Private colleges, meanwhile, don’t receive that direct state support, but they worry about state cuts to need-based financial aid for students, such as the Ohio College Opportunity Grant, which recently saw an increase in funding.
What’s to come
The future is murky as colleges try to plan for autumn.
“I would call it apprehensive,” Jones said of the outlook for fall semesters. “Because our colleges do not know what’s going to transpire, and yet they need to be prepared for a variety of different scenarios of what could happen.”
Currently, the state’s public universities are planning for students and faculty to be back on campus come fall, but they are also planning for other outcomes, Johnson said.
Ohio State’s AAUP asked the university for “timely notice” of changes for the fall term.
“It’s not possible to know too much in advance, but to have a couple or three game plans that might play out” would be helpful, said AAUP board member and OSU associate professor of English Jill Galvan, noting that faculty, staff and students should be involved in the decision-making.
There’s no set timeline or date by which public colleges plan to make a decision about the fall, Johnson said, and each university will handle decisions on its own.
“We certainly want to give parents and students good information in May,” he said. “That’s our goal.”
If students aren’t back on campus this fall, private universities will struggle, Jones said.
“If this pandemic continues and colleges are not able to reopen their dorms and resume some semblance of normal enrollment this fall, that could endanger a number of campuses,” he said.