Colleges in Dire Financial Straits

[spork]

I was referring to a 25% drop in total enrollment.

[picard]

Excerpt from Pittsburgh Post-Gazette's story on the behind-the-scene decision of Allegheny College, a LAC based in rural Western Pennsylvania, to reopen for in-class instructions this fall. While much of the decisions were based on the potential health risks for students, faculty, and other staffs, finances also play some role as well:

https://www.post-gazette.com/news/education/2020/05/31/Allegheny-college-Hilary-Link-COVID-19-fall-semester-reopen-online-Pennsylvania/stories/202005290088

The virus that emptied campuses in March already has cost millions of dollars in income, from endowments and housing refunds to lost event revenue. An ill-conceived reopening could do still more damage — to student outcomes, the college's public image and its bottom line.

Nationally, many students have delayed decisions beyond the traditional May 1 deadline and told survey-takers they will not pay in-person prices for another semester of online classes. Projections of enrollment losses of up to 20% have some schools worried about whether they can survive.

Allegheny College entered the pandemic financially stronger than some small schools, with an $231 million endowment. But COVID-19 promises to inflict heavy costs, many yet to be tabulated.

Even if her college eventually had to pass costs on to students, said Ms. Link, it would likely mean more tuition discounting down the road. The school's total cost to attend tops $60,000, although its net price after financial aid in 2017-18 — what most students actually pay — was about $25,000, according to federal data.

But higher education's convoluted price structure was a topic for another day.

[stemer]

June 1st is now behind us, how are the deposits for Fall at your institution? At our place,  -5% compared to May 1 last year.

[onthefringe]

June 1st is now behind us, how are the deposits for Fall at your institution? At our place,  -5% compared to May 1 last year.

We are actually at +12% compared to last year. We made a bunch more offers in hopes of offsetting expected higher than usual summer melt, and then our yield was surprisingly high. Ot will be interesting to see what happens between now and August.

[selecter]

Way ahead of where I thought they'd be ... but I'm wondering what a deposit means in this environment.

[Asymptotic]

It makes sense to reopen in Allegheny County. The virus didn't;t hit us nearly as hard as expected, and frankly the thing is waning for sure all over.

[Puget]

We made our target after going to the waitlist-- we have ~30% acceptance rate so there is generally a deep waitlist and I doubt quality will suffer.

I haven't seen the exact numbers but we will be lower in international students (who couldn't get visas processed or decided the US was not such a good place to be right now), with the deficit made up with domestic students from the waitlist.

[waterboy]

frankly the thing is waning for sure all over

Not sure about that - check the southern states, and MA.

[Hibush]

frankly the thing is waning for sure all over

Not sure about that - check the southern states, and MA.

The rural Northeast did a good job isolating, so there has been low pressure. That created fertile ground for denialists, who are abundant in Western PA where Allegheny is located. I expect reckless behavior to set in soon. This area might look like Mississippi by the time the Fall semester is supposed to start.

[spork]

We made our target after going to the waitlist-- we have ~30% acceptance rate so there is generally a deep waitlist and I doubt quality will suffer.

[. . .]

Please hire me.

[BadWolf]

My SLAC is about 25% above target and 6% above last year's incoming class. Now anxiously awaiting retention on that class (not going to be pretty), as well as the deferrals and cancel after deposits. Parents seem to be treating this as business as usual for now. I also think with some people having financial concerns, they are not going to throw down a deposit they can't afford to lose, so the melt may not be as bad as some expect.

[Hibush]

June 1st is now behind us, how are the deposits for Fall at your institution? At our place,  -5% compared to May 1 last year.

Deposits are looking good, but filling the class is never a concern. However, the Expected Family Contribution is anticipated to be down sharply for many students whose parental income dropped during the year. Meeting that need with additional financial aid will be very expensive.

[Hibush]

Why the apparent good deposit news isn't necessarily good financial news.   Here is the overview for fall via IHE

Higher education enrollments could increase between 2 and 4 percent in fall 2020, according to a new report by Moody's Investors Service. But even if enrollment increases, net tuition revenue and other student revenue for the 2021 fiscal year will likely decline between 5 and 13 percent.

For schools in shaky financial condition, an increase in instructional expenses of a few percent (to accommodate higher enrollment) combined with a reduction in net revenue of 10% could put them in Dire Financial Straits.

[marshwiggle]

Why the apparent good deposit news isn't necessarily good financial news.   Here is the overview for fall via IHE

Higher education enrollments could increase between 2 and 4 percent in fall 2020, according to a new report by Moody's Investors Service. But even if enrollment increases, net tuition revenue and other student revenue for the 2021 fiscal year will likely decline between 5 and 13 percent.

For schools in shaky financial condition, an increase in instructional expenses of a few percent (to accommodate higher enrollment) combined with a reduction in net revenue of 10% could put them in Dire Financial Straits.

For places operating totally online, the upside is that over-enrollment isn't a big problem. Having 10% more students online doesn't pose the same problem as 10% more students than the classroom or lab will hold.

[secundem_artem]

For those of you who are despondent about the state of higher ed, and more specifically the humanities, the following is a full throated defense.  The comments on the article however, are much more of a mixed bag.  Everything from "I really valued my humanities education" to "Burn it all down.  Universities have brought this on themselves."  You know, kinda like the discussion right here on the good ol' fora.

https://www.nytimes.com/2020/06/04/opinion/coronavirus-college-humanities.html