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10 Observations on COVID-19 and Higher Ed

How higher education will change -- and how it won't.

December 15, 2020
 
 
  1. College policies on COVID-19 -- whether students should study on campus or in distance modes, when they should go home for vacation, and how they are regulated while present on campus -- have a potentially immense impact on host communities. As a New York Times study recently revealed, “since the end of August, deaths from the coronavirus have doubled in counties with a large college population, compared with a 58 percent increase in the rest of the nation. Few of the victims were college students, but rather older people and others living and working in the community.”
  2. The Trump administration has not promulgated specific COVID regulations for higher education. In this vacuum, institutions have been free over the last nine months to work with state and local regulators to develop individualized plans, programs and protocols. Dr. Anthony Fauci recently told a higher education audience to expect a more centralized federal response under the Biden administration. Given the important role colleges play in spread of the virus, I would not be surprised to see the new Biden team establish some new universal federal requirements for higher education institutions. This may require some colleges and universities to alter their processes and procedures in significant ways.
  3. Though the coronavirus vaccine will begin to arrive this week, things will not return to anything like normalcy until late in the fourth quarter of 2021, due to the deliberate speed of the rollout and the reluctance of many Americans to get the shot. For higher education, this means continued restrictions on business until late 2021 -- and continued revenue loss well into early 2022. The coming year will be challenging.
  4. High education employment has shrunk over 7 percent already, with almost 350,000 workers losing their jobs. Cuts have been greater in public than private higher ed. Additional cuts are inevitable as the pandemic and related economic turmoil continue. Some of these cuts probably represent efficiency gains, but the reality is that low-wage job holders have been hurt the most. Even where greater efficiency has been achieved, the damage to an institution’s sense of community when it eliminates the jobs of its most vulnerable workers is significant and has to be factored into decision making.
  5. Congress is struggling to pass a second COVID-19 relief bill, but I think it will break the logjam and reach agreement on a scaled-down bill before it leaves Washington for the Christmas holidays. The bill will likely provide significant assistance to colleges and universities, but not come close to the $120 billion the American Council on Education has said is necessary. The aid will provide more help to students and reduce pressure to cut staffing but will not be large enough to alter the short-term budget trajectories of most institutions. All this could change if the Democrats win both Senate seats in the Georgia special election on Jan. 5, an event that would deliver control of the Senate to the Democrats, opening up additional possibilities for large-scale assistance.
  6. In a typical recession, community college enrollment is countercyclical. When economic growth and employment decline, community college enrollment goes up. During the COVID-19 economic shock, in contrast, community college enrollment has dropped almost 10 percent. This suggests to me that (a) COVID-19 is not just reducing employment, but undercutting the sense of hope and human agency that is necessary to enroll in any job skills or education program, and that (b) many families right now in the lower 50 percent of national wealth simply cannot cover the small marginal costs of college enrollment, even if financial aid picks up the bulk of the expense. Keynes observed that investment declines when there is great uncertainty about the future, and that holds true with personal investment of time and money in learning.
  7. In contrast to community colleges, private for-profit institutions are seeing enrollment increases. This is due, in part, to an enrollment push by these schools before new Biden administration regulations on predatory for-profits are put in place, but it also reflects better marketing. In nonprofit higher education, many stakeholders hate talking about their university’s brand, but the truth is, your brand is what will save you as higher education goes through tough times. Schools need (a) a clear, unique and compelling value proposition that (b) is effectively communicated to (c) a well-defined target audience. The for-profits have been good at this. Those of us who care deeply about nonprofit higher education need to do better.
  8. As a college president, I was very conservative on endowment management, implementing a multiyear reduction of my college’s endowment draw. But in the current circumstances -- a major pandemic accompanied by very strong investment returns -- I think using unrestricted endowment capital to fill short-term holes in one’s budget is totally appropriate, in order to avoid long-term devastation to the school’s human capital: its faculty and staff. I would suggest, for most schools with moderate endowments, a 75 percent benchmark: most of one’s budget deficit should be filled by spending cuts, but a quarter, if necessary, by an emergency endowment draw.
  9. As institutions cut their budgets, they also need to invest. The three priority areas for institutions of every type are (a) admissions, (b) communications and (c) career services. These priorities will gall some faculty members, but enrollment pays the bills, including faculty salaries, and enrollment strength is contingent on implementing smart, robust strategies in these three areas. Investment in faculty and curriculum will be possible if, and only if, tuition revenue is healthy. It would be nice to think that investment in academic programs automatically produced enrollment returns, but alas, this simply is not true. It takes marketing to reach the market.
  10. Will COVID-19 permanently alter or disrupt higher education? I think not. More universities will permanently enter the online education space, leading to greater price competition, and this may attract some students to pursue online options. But I think the pandemic has revealed the weaknesses, as well as the strengths, of distance delivery models, and I expect demand for traditional in-person education to bounce back robustly.

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