Declining enrollment and loss of tuition puts colleges in financial difficulty
The sharp decline in enrollment due to the pandemic has taken a heavy toll on the finances of many colleges and universities, and the impact could last for years.
At this point, 67% of higher education leaders said declining revenue from tuition fees and student housing are the biggest challenges they currently face, according to a recent survey by consulting firm NEPC. , endowments and foundations.
Overall undergraduate enrollment has fallen 4% this year, according to separate data from the National Student Clearinghouse Research Center, with incoming freshmen accounting for the biggest drop – falling 16% from the previous year. last fall.
For many colleges and universities, the consequences could be severe, according to Sam Pollack, partner in NEPC’s endowments and foundations practice.
“The coronavirus pandemic has created the most severe liquidity crisis higher education has seen since the global financial crisis,” he said.
As many schools have moved to a hybrid approach to education, with a combination of in-person and online classes, the number of students living on campuses has also dropped significantly.
Almost three-quarters of those surveyed by the NEPC said occupancy of school-owned accommodation – another key source of income – has fallen this year, and around a quarter said it has fallen by more than 50%.
Even before the global pandemic caused craters in the economy, some institutions were facing financial difficulties after years of severe cuts in public funding for higher education.
Already, universities have laid off thousands of employees and announced revenue losses of hundreds of millions. Some have even cut academic programs that were once central to a liberal arts education in order to stay afloat.
The NEPC interviewed about 50 higher education executives from colleges and universities across the country. The National Student Clearinghouse Research Center collects data from over 3,600 post-secondary institutions.
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