Class of COVID-19

A spring shutdown devastated Oregon’s colleges and universities. How will they survive the financial fallout from the pandemic?

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Back to school never looked like this.

With the COVID-19 pandemic upending every aspect of higher education, Oregon’s colleges and universities are scrambling to find balance this fall.

While none are opting to go 100% virtual this September (yet), the state’s more than 100 public, private and community colleges are wrestling with if and/or how to welcome students back safely.

And they are also struggling with how to balance budgets severely impacted by the pandemic and the predicted upcoming recession.

Colleges in Oregon and around the U.S. were already feeling a financial pinch thanks to sky-high tuitions and increasing concerns over unsustainable student debt. The decline in foreign student enrollment — a solid income source as this cohort pays higher, out-of-state tuition — makes matters worse.

And then came COVID-19. As students, faculty and staff went home in the spring to figure out how to finish the school year online, administrators tallied up their losses from refunding housing, dining, parking and other auxiliary service fees.

Portland State lost “many millions of dollars in housing alone,” estimates Brian Roy, associate vice president, risk management and contracting. The University of Oregon projects it will lose between $21 million and $22 million in auxiliary funds, according to a PowerPoint presentation given by Jamie Moffitt, vice president for finance and chief financial officer.

Devastating as that sounds, these institutions fared better than the for-profit Pioneer Pacific College, which closed its Oregon Culinary Institute in downtown Portland, as well as other facilities in Portland, Beaverton and Springfield. In a financial bind to start, the school pointed to the pandemic as driving the final nail into its coffin.

So what does operating in the age of the novel coronavirus look like for the state’s public, private and community colleges? Well, it depends on who, and when, you ask.

One thing is certain, coming back to campus will look different. But no one really knows how different. Learnings about the virus keep changing and infection rates keep surging, all while the clock ticks closer to September.

College reopening plans reflect this uncertainty.

Back in early May, three-fourths of U.S. campuses tracked by The Chronicle of Higher Education planned for in-person operations.

By early July, that number dropped to 55%. In late July, at the time of this writing, the national picture remains a mixed bag, with 21% of schools planning on running primarily in person, 24% choosing primarily online and 16% going with a hybrid approach.

Most telling, the largest fraction, 27%, are still undecided.

Oregon schools contacted for this article fall into these buckets but do not expect any decision to be concrete. The University of Portland, in North Portland, for example, just changed course from offering a hybrid approach to conducting almost all classes online.

“Even with well-conceived plans developed by three interdivisional task force groups, we were always aware that factors beyond our control could force us to change direction,” says university president Rev. Mark L. Poorman in a press release.

The document points to slow turnaround times for COVID-19 testing, lack of vaccination and treatments, a portion of the student body coming from states where the virus is spreading and a concern about the pandemic’s inordinate impact on communities of color as reasons for this change.

For those still planning an in-person or hybrid approach, the plans for student, faculty and staff safety remain fairly similar: Tamp down the number of people on campus, bump up the cleaning and disinfecting, mandate face coverings and hope that a cohort of 18- to 22-year-olds, already pent up from six months of isolation, will abide.

“Only 800 students will be living on campus; that’s a 30% reduction,” says Kevin Myers, spokesperson for Reed College, located in Southeast Portland. This means that every dorm room will be a single, and one entire dorm building will be set aside for COVID-19-positive students to isolate.

At press time, the University of Oregon announced most of its classes will be remote and online for fall term.

It will take a lot of planning, flexibility and finger-crossing to bring students back on campus. Not having students back to campus, however, promises to devastate a school’s auxiliary units. These departments — housing, parking, dining and the like — are self-funded through fees. They receive no financial support from tuition or, in the case of public schools, the state.

No students on campus means no fees for these units.

Oregon State University estimates a potential revenue shortfall as high as $100 million, according to vice president of university relations and marketing Steve Clark. The University of Oregon predicts big losses if on-campus student activities are severely curtailed.

It also looks like the University of Oregon is hoping to stem some possible losses in the coming school year by putting some of this financial risk entirely on students and their families.

According to its website, “If the university goes fully remote for all or portions of fall, winter, or spring terms, but the university does not close, the residence halls, the room and meal charges and contract terms are the same as if classes are delivered in-person, remotely, or online.”

The cancellation of the Pac-12 college football conference is also a large financial blow. Football funds between 70% and 75% of the University of Oregon’s athletics budget.

The financial pain of an empty campus is not just confined to the school. Eugene, home of the University of Oregon, and Oregon State’s home of Corvallis are already reeling from the first lockdown in March.

“When the students left this spring, the restaurants and retail near the University of Oregon were severely impacted,” says Anne Fifield, economic development planner for the City of Eugene, via email. “Many of the events that those businesses rely on, including sporting events and graduation, also vanished. Businesses across the city and region, including the hospitality sector, had significantly fewer customers.”

Fourth-quarter figures from the hotel-lodging tax in Corvallis starkly illustrate this effect. Public information officer Patrick Rollens reports a 64.9% drop in room nights year over year between June 2019 and June 2020, resulting in a 77.1% drop in total hotel revenue. That adds up to $622,025 total revenue in June 2020, down from $2,719,105 in June 2019.

Rollens also points to another issue with potentially longer-lasting effects: the U.S. Census, which counts people where they live as of April 1. “The Census was just ramping up its efforts when most universities went to online-only instruction,” he says via email. “Many students went ‘home’ and effectively went off the grid as far as the Census is concerned.”

He hopes having students back in the fall will make it easier for Census workers to “effectively enumerate them and achieve our goal of having everybody counted in Corvallis.”

But how do community members — who perhaps do not own a hotel or restaurant — feel about an influx of students creating a potential surge in virus cases? Rollens admits that he has heard some concerns, amplified by “reports in the spring and summer about groups congregating in apparent violation of the statewide public health guidelines.”

He hopes more education and awareness will “help improve behavior and will lead to better outcomes when students return to Corvallis.”

Because the situation is so fluid and fast moving, colleges and universities all over the country are postponing their acceptance deadlines. Students are taking their time to decide if they are going to come at all. Inside Higher Ed reports that four-year colleges may face a loss of up to 20% in fall enrollment due to COVID-19.

One might think this uncertainty would lead to an influx of high school seniors opting to fulfill their general education requirements at their neighborhood community college. Yet the majority of Oregon’s 17 community colleges are reporting that, as of this writing, enrollment is either flat or down from last fall.

“In conversation with parents and community members, many are waiting to see what happens to K-12 schools reopening and/or opening virtually,” explains Cam Preus, executive director of the Oregon Community College Association, via email. “If that is the case, then student parents will not return to college.”

Preus also notes students reporting being exhausted and finding it hard to concentrate. “Some are considering delaying coming back to college, community college or university. [I am] not sure if that is a gap year or simply a gap term, but there is clear unease about returning with COVID cases running apace.”

And the outlook is less rosy for students and families hoping to take advantage of the Oregon Promise, the state grant that helps cover tuition costs at any Oregon community college for recent high school and GED-test graduates.

The Higher Education Coordinating Commission projects funds for new-student awards to be reduced by $3.6 million. This means the Higher Education Coordinating Commission will be required to revoke some awards issued to students for fall 2020 to meet the budget limitations. 

Enrollment data at Oregon’s public colleges and universities tell a complex story. To date, projections for fall term at Oregon State remain strong for Oregon resident students, according to Clark, but they do “estimate that enrollment of international students, particularly first-year students, will be down from past years.”

The University of Oregon has seen increasing enrollment from domestic students, including a record freshmen class last fall. Yet at the same time, they have seen a large drop in international-student enrollment since fiscal year 2016, a trend that may be caused by U.S. foreign policy, slowing economies in Asia, competition from foreign universities and the absence of programs such as engineering that appeal to many international students, according to media and communications manager Saul Hubbard.

“From 2016 to 2019, international enrollment at the UO dropped by almost 1,500 students,” Hubbard says, “representing a reduction of more than $50 million a year in recurring tuition revenue.”

Oregon public universities have had to rely more and more on those tuition dollars to make up for cuts in state funding due to the last recession. The University of Oregon, for example, lost 45% of its state operating support, which pencils out to $37 million a year.

As a result, tuition at every college in Oregon has gone up since 2015, with an average statewide tuition increase of 14% in the colleges over the past four years.

Threats of a COVID-19-caused recession will surely harm the state contribution further. Initial budget exercises in May predicted draconian cuts. The most recent plan in discussion is not as dire.

“At this time, we are cautiously optimistic that the core operating funds that pay for instruction and operations at the public colleges and universities, as well as the state’s largest need-based financial aid program for students, are protected from cuts for the coming academic year (2020-21) in the current co-chair’s budget plan,” says the Oregon Higher Education Coordinating Commission’s executive director, Ben Cannon.

Yet there is still plenty on the chopping block, including the Oregon Promise grant, as well as statewide public services administered by Oregon State University including the Agricultural Experiment Station, the Extension Service and the Forest Research Laboratory programs.  

Private schools, like Reed College and George Fox University, do not rely on state funding but will face challenges of their own. “We do project a 12% drop in undergraduate, new student enrollment this fall and have made preemptive adjustments to our budget,” says Rob Felton, director of executive communication at George Fox University, via email.

Fall admissions still look good at prestigious Reed College, with spokesperson Myers reporting this year’s incoming class is the same size as last. “That’s great news for us.” Myers also points to an excellent Moody’s standing and healthy endowment and fundraising efforts as more good news. “We can’t go on like this in perpetuity, but Reed should be able to weather this storm.”

George Fox reports a positive summer, from a fiscal standpoint, due to an increase in online classes and an influx of graduate students transferring from Concordia. (Concordia, once Oregon’s largest private university, shuttered unexpectedly a few weeks before Gov. Kate Brown issued stay-at-home orders. Both schools are linked by their similar Christian missions.)

Reed, Oregon’s version of an Ivy League school, and George Fox, a Christian school, are fairly rarefied examples of the state’s 15 small liberal arts colleges.

As for Lewis and Clark, Willamette and the rest, well, time will tell if these organizations are resilient enough to last. (The Oregon Alliance of Independent Colleges and Universities, an advocacy group that represents the schools, did not respond to multiple requests for information.)

So how will Oregon’s public and private schools fund themselves? Tuition cannot go up. “We have been loud and clear on this point,” says University of Oregon’s Moffitt.

But it is not going down either. “Tuition will remain the same,” insists Reed’s Myers. “Students are going to have access to the same education and the same professors. They are all working toward degrees. Some people will be in person, some will be in Zoom, but everyone can interact.”

So schools will muddle through, like everyone else. The state contribution for public schools looks far less draconian for 2020 and 2021 than predicted in May.

But beyond that is anyone’s guess. What is certain is that the pandemic’s impact on the economy will last for years. In the meantime, schools are eliminating travel, enacting hiring freezes and otherwise cutting costs.

Some are leveraging their already existing virtual presence. Oregon State reports that enrollment in its nationally ranked online degree programs offered through Ecampus remains strong. George Fox created George Fox Digital, an immersive online-learning experience aimed at helping first-year students join remotely and complete general-education requirements.

“This program equips students to graduate in four years, one online and three on campus,” says Felton. He adds that tuition for this program is set at a lower rate.

And Felton is confident George Fox will survive this pandemic, like it survived the Spanish influenza of 1918. “We’ve adapted, innovated, sacrificed and worked our way through many hard times,” he says. “These are uncertain and challenging times, but we’ll find a way.”

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