Apr 23, 2020 - Economy

Coronavirus sends American universities over a cliff

Illustration of a graduation cap falling off of a cliff

Illustration: Aïda Amer/Axios

Hundreds of thousands of high school graduates from all over the country and the world are set to start college this August — and they have no idea what they're getting into.

Why it matters: The coronavirus pandemic is accelerating a troubling trend of falling enrollment at American universities. This could push many institutions over the edge.

The big picture: The pandemic is hitting universities amid an intensifying, nationwide debate over whether college is worth the cost.

  • Rising tuition, coupled with fear of accruing mountains of student debt, have chipped away at enrollment. In 2019, 250,000 fewer students were enrolled compared with 2018, per NPR.

Now institutions are contending with a crisis unlike anything they've navigated in recent history.

While only a few universities have finalized their plans for the fall, a normal semester seems increasingly like a pipe dream. And the financial punishment that colleges will endure is becoming clear.

  • Enrollment could plummet even further — especially among incoming freshmen unwilling to pay sky-high tuition for online classes.
  • On top of that, many universities will suffer lost revenue from athletics, room and board.
  • For public campuses, state money could dry up. "Funding for higher education is very volatile during a recession," says Robert Kelchen, a professor at Seton Hall University in New Jersey who studies higher education finance. "It's the easiest place to cut in state budgets."
  • The University of Michigan has predicted it will lose $1 billion due to the coronavirus. The University of Kentucky projects a $70 million hit.
  • The University of Arizona has announced furloughs and pay cuts for faculty, per the Arizona Daily Star. And many colleges and universities have already implemented hiring freezes, reports Inside Higher Ed.

While universities grapple with the pandemic, millions of students' futures hang in the balance — and students and parents aren't getting many answers from schools. "Colleges are trying to wait as long as they can to make this decision," Kelchen says.

Diane Klein, a law professor at the University of La Verne in California, tells Axios that "so many universities are so enrollment-sensitive, so tuition-dependent, that we can't be honest with our prospective students about what they’re going to get."

Her advice to incoming freshmen is to take a year off and start college in 2021 if they can — but that's not an option for many students.

  • Nate Davis, a senior at a high school outside New York City, is planning to attend Dartmouth this fall to play lacrosse — and a gap year wouldn't work because he was recruited as part of this year's class. "No matter what, I think I'll be going in the fall, whether that's there or at home," he said.
  • Ellyn Fritz is heading into her junior year at Franklin and Marshall College in Pennsylvania and has been taking online classes this spring. She has cancelled plans to study abroad in South America next semester, but still intends to move back to an off-campus apartment in Lancaster this fall and take classes from there — online or not.
  • Andrew Fleming, a senior outside of Detroit, hasn't made his final college decision but is planning to major in musical theater. "Online classes don't really appeal to me because there's such a big gap in the fundamentals of being a performing arts major," he says. He plans to take a gap year if classes are held remotely.

The bottom line: The likeliest scenario for America's students is another semester of Zoom lectures and seminars — meaning they'll miss out on athletics, arts, Greek life, extracurriculars and everything else that defines the college experience.

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