On a good day, higher education in Colorado is in dire financial straits, but during a pandemic, the financial toll to the institutions fortifying brights minds and bolstering the state’s workforce could mean a loss of hundreds of millions of dollars — forcing reductions in staffing and student support services.
Colorado’s colleges and universities, 48th in the nation for state funding, have a thin buffer to withstand a big financial challenge, said Todd Saliman, the University of Colorado’s chief financial officer.
In the past month — since colleges across the state rapidly transitioned classes online and encouraged students to vacate their dorms — CU took a $44 million hit refunding impacted students’ housing and dining costs and paying hourly and student employees throughout the crisis.
“We are just trying to do right by everyone,” Saliman said.
Between Colorado State University’s two campuses, the university paid out around $19 million in rebates for students’ housing and dining costs in the past few weeks since shuttering campus for most students in a bid to reduce the spread of the highly contagious COVID-19. Durango’s Fort Lewis College gave back $2.8 million in spring semester room and board.
“These aren’t just numbers,” said Tom Stritikus, Fort Lewis College president. “While there’s money going out the door, our institutions have moved heaven and earth to meet the needs of our students.”
On Wednesday, more than a dozen higher education institutions across the state signed onto a letter to Colorado’s congressional delegation, senators and state representatives asking for relief for colleges and their students. The letter projected room and board refunds could reach $100 million in Colorado.
“The Association of American Universities estimates auxiliary revenues at colleges and universities will decline by at least 25% or $11.6 billion nationwide,” the letter read. “We estimate this figure could soar above 75% in Colorado if students are unable to return to campuses this fall. Our institutions contribute approximately $20 billion in annual economic impact to Colorado and are the largest employer in some parts of our state, which means the financial crisis we are facing will reverberate beyond our campuses and into the rural and urban communities we serve.”
Before the coronavirus pandemic, higher education institutions were lobbying for a state funding increase that would have yielded CU a 6% hike in funding, Saliman said.
“It’s highly unlikely that is going to happen now,” he said.
Colorado lawmakers are bracing for a state budget shortfall of up to $3 billion, potentially forcing cuts of up to 10%.
A 10% loss in 2020-21 state funding would amount to a nearly $25 million hit to CU’s four campuses, according to a model presented at a CU Board of Regents meeting last week.
Higher education administrators looking to the future are left staring into the dark unknown, like most industries and citizens wondering how long the pandemic and its disruption to daily life will last.
“There are so many variables unknown at the same time that it’s creating multiple scenarios to be ready for,” said Henry Sobanet, CFO of the CSU System.
Questions on the mind of every higher education official include: Can colleges open their doors back up come fall semester? If so, will students want to come back? How will international student enrollment be impacted by the global pandemic?
“Our students have gone through a tremendously destabilizing event,” Stritikus said. “Predicting how they’re going to react in the fall in terms of wanting to come back is another unknown variable.”
Even a 1% decline in enrollment would mean a revenue loss of more than $11 million, according to the university’s budget presentation.
On Thursday, U.S. Secretary of Education Betsy DeVos announced $14 billion to be distributed to postsecondary education institutions and students across the country. A bit less than half of that must be immediately given to colleges and universities as emergency cash grants to students impacted by the coronavirus, according to a news release by the U.S. Department of Education.
“The funds DeVos mentioned yesterday go directly to students and cannot be used by our institutions for current COVID-19 related expenses,” said Megan McDermott, spokeswoman for the Colorado Department of Higher Education. “We are thankful for what has been appropriated, but it’s not enough to fill the gaps for our colleges and universities.”
CU’s budget presentation last week presented grim budget balancing options for each campus in the event of significant financial damage, including employee furloughs and layoffs, reductions in investment in classroom technology and infrastructure, the reduction or elimination of planned raises, and reduced student support services.
“Federal funding is so important because if it provides significant relief to the state, we won’t have to pursue as many things on this list,” Saliman said.
Colleges and universities will have a better understanding of their financial futures in coming months when the state budget is solidified and federal assistance is figured out.
No matter the impact to Colorado’s postsecondary institutions, Sobanet said, higher education will be one of the ways out of the COVID-19 hole.
“Higher education wants to be part of the comeback,” Sobanet said. “That’s the one thing I’ve been hearing everybody talk about. From contributing research or getting students back to continue and get out into the workforce, I think that’s the one thing I’ve heard across the board is even though we’re taking impacts just like everybody else, we want to be part of the comeback.”
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