Reimbursements, revenue losses could cost York-area colleges millions
The coronavirus outbreak could cost some colleges and universities in southcentral Pennsylvania millions in lost revenue.
Colleges and universities throughout the region are reimbursing students up to 50% of payments for housing and other fees after the pandemic forced the cancellation of most of the spring semester.
Most are not refunding tuition, as education and access to resources continues remotely through the remainder of the school year.
Regional institutions join others nationwide that are taking huge revenue hits as they deal with reimbursements to students, losses from ticket sales and unexpected expenses needed to make the transition to online education.
Early estimates say total revenue losses at Shippensburg University could be $10 million to $12 million, said Kimberly Garris, vice president of external relations and communications.
"We are still in the middle of this pandemic, and as you know, it’s changing all the time," Garris said, noting the uncertainty in predicting financial losses now. "We just have no idea."
State system spokesman David Pidgeon said the system as a whole is projecting a revenue shortfall of about $100 million from reimbursements, but with costs savings and federal stimulus, the outbreak is expected to cost the system $52 million.
Dozens of schools nationwide have turned to hiring freezes to stymie the decline, The Associated Press has reported.
All this comes on the heels of an enrollment decline that's already thinning budgets.
"Like other institutions across the country, we are still working to understand the impact of the coronavirus on our campus and our finances," said York College spokeswoman Mary Dolheimer, in an email.
Dolheimer declined to comment further on financial impact but said that revenue losses such as student reimbursements, delayed building projects and changes in recruitment strategies were considerations for the college.
York College and State System of Higher Education universities Shippensburg and Millersville are reimbursing students housing, dining and parking expenses.
Millersville and Shippensburg are refunding close to 50% of these costs, based on the percentage left of the school year — for most students, this would be the entire spring semester.
York College reduced its cost of attendance to reflect that students are now commuters, adjusted housing and meal costs based on financial aid and prorating them based on the number of days residence halls were open, according to its website.
Millersville has a comprehensive FAQ for students on partial refunds for student fees, housing, dining and parking, and payouts range from $0 to about $3,180.
For example, students will receive 46.6% of their max dining balance or their current balance back in full — whichever is less. A student with 15 credits, a $600 lunch balance and housing for $4,953 would receive a total refund of $3,180.74.
Fortunately, local universities have also found savings in several areas.
As a commuter campus, Penn State York lucked out on not having to provide housing or parking reimbursements, and its dining is handled by an outside company.
The university will see about $50,000 in losses to its event revenue from the Pullo Family Performing Arts Center through May, but some of those events might be rescheduled in the fall, officials said.
The cost of online education has also been minimal, as Penn State York has relied on resources from its main campus. Shippensburg spent $250,000 up front, though investments will continue as needed, Garris said.
Additionally, Penn State York was able to use some of the money it would have used on daily operations toward hotspots for students.
Plans to recoup costs are ever-changing, said Garris.
"You plan one week, and the next week you learn something new," she said, noting that the university's post-pandemic plan to address long-term sustainability is ongoing.
For now, officials are following state system guidelines for employees — with a mix of paid and unpaid leave — but no layoffs, she said.
Penn State York has not had to institute a hiring freeze yet but is cautious about searches in progress and has ended some out of an abundance of caution, said Chancellor David Christiansen.
All this, however does not take into account changing enrollment, which could be cause for additional losses, though it's too early to predict fall enrollment for some.
Stephen Herzenberg, economist and executive director of the Keystone Research Center, a local offshoot of the left-leaning Pennsylvania Budget and Policy Center, said although research has shown enrollment increases in a recession, it might depend on if students can afford it.
Higher education is slated to get $14 billion in federal stimulus money, but The American Council on Education, an association of college presidents, argued that amount would be "woefully inadequate," The Associated Press has reported.
"I think it’s probably safe to say that federal aid won’t make up for all the losses," Garris said.
After the Great Recession, Herzenberg said, federal stimulus funds were used in part to fund higher ed, but the biggest state spending cuts in 2011-12 were where the state had substituted stimulus funding.
The state was already underfunded in higher education and became even more so, and state officials can't make that mistake again, he said.
The National Clearinghouse Research Center reported April 15 that, based on data following the Great Recession, enrollment shifts will not be immediate, and the greatest increases will be among older students at community colleges and for-profits.
“However, the coronavirus impact will likely be different, especially among out of state and international enrollments, as many students will want to stay closer to home, and students that continue with on-line education options,” stated executive director Doug Shapiro.
“State budgets will undoubtedly be hit hard again, even as some states were just now getting their higher education funding back up to pre-recession levels,” he said.
Since many students end up leaving the York area for college, Penn State York's Christiansen actually believes staying closer to home will help boost enrollment.
"We’ll wait till the smoke clears in September," he said.