Online University Teaching Could Increase Financial Risks in the Fall

“When the California State University system decided to conduct all of its classes online this coming fall, administrators said it was to avoid the health risks associated with COVID-19. Many other colleges are making similar decisions as they move online.

“Wayne State University and Michigan State University are likely to go online – but may offer a hybrid of online and in-person classes. USC will offer nearly every course in an online version. The University of Pennsylvania is offering four scenarios, three of which are mainly online. Six of Harvard’s 12 schools, including its School of Law, will be online in the fall.

“While an all-online term – or nearly-all-online term – reduces COVID-19 risks to students and staff, it also will likely increase the financial risks to universities. It also can reveal preexisting financial strains, particularly at state colleges that are much more dependent than they used to be on high tuition revenues.

“As a scholar of higher education, I have examined the precarious state of funding at America’s public universities and have tracked a plummeting of state funding to support them over the last 20 years. Colleges are looking at very high costs for keeping campuses open for students and staff if the pandemic continues. But if these costs force many colleges not to open or to open in a very limited way, it may take years to recover from the financial hit. Some colleges may not recover at all…

“College administrators understand that closing campuses reduces health risks while creating financial ones. The biggest of these is that students will not want to pay full tuition for online college. Surveys show that student satisfaction with remote teaching this spring has been low. Parental satisfaction was also low: They rated remote course quality as 5.6 out of 10 in one survey.

“Another survey found that one-third of students would transfer out of their college ‘if their college continued online instruction for the fall semester.’ Revenues may be hit by the fact that 79% of students said they would expect lower tuition for online or hybrid courses.

“Wealthy private universities like Brown and Notre Dame may have decided that the financial risks of losing students are too great, and also have the money to regularly test everyone every week and undertake similarly expensive measures…

“Tuition revenue had not made up for lost public funding even in pre-COVID-19 times. Tuition’s limited financial powers will be reduced even further if colleges can’t open fully in the fall – at least this is the fear. It is – in my view – a reasonable one: Many students may indeed decide not to enroll if colleges can’t open campuses.

“Only additional federal stimulus funding can solve the COVID-19 challenges that America’s public colleges and universities face. Higher education organizations initially requested $46.6 billion in COVID-19-related recovery funding. The CARES Act sent universities about $14 billion instead.

“The current stimulus bill, the HEROES Act, provides an additional $32 billion for higher ed. But it may not survive the Senate. State legislatures seem to be betting on ‘too little too late’ in the way of federal help and are planning major cuts to their higher education sectors, or are making steady budgets contingent on receiving federal money this summer. The absence of federal stimulus funding will leave most public college without good choices.

“Universities want to resume face-to-face teaching as soon as is safe because, overall, students learn more than with remote instruction, especially students of color. To give their colleges a shot at a safe 2020-21 year, states must not cut their colleges and universities’ operating budgets. Colleges also need additional COVID-19-related cost support while there is still time to build the protocols and facilities that will allow them to open as much as COVID-19 will allow this fall…” (Prof. Christopher Newfield, University of California, Santa Barbara).

The Conversation