A Lifeline for Sinking Budgets

Stimulus funds will help black colleges whose resources were stretched thin responding to the pandemic. 

April 24, 2020
 
North Carolina A&T

Presidents of colleges and universities that primarily serve black students heaved a collective sigh of relief when they learned their institutions would be getting a special allocation as part of the stimulus package approved by Congress last month.

That's because, in addition to the $12.2 billion coronavirus-related stimulus funding that went to higher education institutions, the legislation allocates approximately $1.05 billion in emergency aid to historically black colleges and universities (HBCUs), tribal colleges and universities (TCUs) and other minority-serving institutions (MSIs). Just over half of the funding will go to HBCUs, and for many of the 101 eligible institutions, the money can't come soon enough.

Most of these institutions -- relatively small, underresourced and highly dependent on revenue from student enrollment -- operate on very tight budgets and were already struggling financially before the pandemic. Many, but not all, were pushed precariously close to the edge of economic ruin by the public health crisis.

The colleges and their students lacked the technological infrastructure to easily move from in-person to remote instruction after evacuating their campuses and had to hustle to purchase new laptops, distance learning platforms and other technology. They also had to upgrade their internet capabilities and quickly train faculty and staff to teach and work fully online. The spending meant expenditures for which most of the colleges had not budgeted and could not afford.

“They were under duress,” said Lodriguez V. Murray, senior vice president for public policy and government affairs at the United Negro College Fund, which provides general scholarship funds for 37 private HBCUs. “Emergency spending always costs more than planned spending.”

Some of the colleges also refunded students for unused housing and meal plan fees. Others simply could not afford to -- and did not.

Murray said a president of an HBCU he declined to name approached him last month just before many of the institutions announced extended spring breaks and campus closures and told him the college was on the brink of financial ruin.

“If we don’t get help, we expect coronavirus to put us into the red by $2 million to $4 million by the end of the fiscal year,” Murray said the president told him. “This is an institution that does not have $2 to $4 million to give.”

While colleges of all types across the country are dealing with budgetary challenges, for HBCUs these new spending obligations can exacerbate their long-term financial standing and threaten their future viability. HBCU presidents are worried their institutions will be penalized by accreditors for having insufficient operating funds and placed on probation or stripped of accreditation outright, which Murray noted would then make the institutions ineligible for federal aid.

Harry L. Williams, president and CEO of the Thurgood Marshall College Fund, which represents and supports public HBCUs and predominantly black institutions (PBIs), also heard from several presidents who told him that housing and meal plan refunds cost their individual institutions amounts ranging from $8 to $9 million.

Students that attend HBCUs also faced challenges -- some 75 percent of them are from low- to moderate-income families and qualify for federal financial aid. Some returned home to communities where broadband access is limited or unavailable and would have difficulty accessing classes and other instruction online. The colleges had to provide these students the right technology to access instruction remotely. Other students could not afford the transportation costs to return home.

Students lost jobs, as did their family members, as businesses closed to prevent the spread of the coronavirus. Others still had no homes to which to return. The colleges either paid those travel costs or paid for temporary housing for students.

“We’re hoping the campus will be able to recoup those dollars paid, which played a critical role in their cash flow,” Williams said.

His organization and the UNCF led the effort to lobby members of Congress to help the cash-strapped institutions. The organizations, along with the National Association for Equal Opportunity in Higher Education, the umbrella organization of HBCUs and PBIs, jointly wrote to Education Secretary Betsy DeVos requesting flexibility in the rules stipulating how the money can be spent, to allow the universities to use some of the funds to reimburse themselves for the expenditures and recover their emergency outlays.

“This additional flexibility will allow schools to put previously restricted funds directly to use in addressing the new challenges that our schools and their students face during the ongoing health emergency,” Williams said.

The Department of Education has not yet responded. Williams noted that the new law allows the Education Department to loosen the spending restrictions on the other CARES Act funds that have already been appropriated to higher ed institutions.

Bipartisanship in Uncertain Times

Williams said the political significance of the special funding was not lost on HBCU administrators.

“This is unprecedented in terms of these dollars,” he said, “and we’re living in unprecedented times.”

He credited U.S. Representative Alma Adams, a North Carolina Democrat, founder and co-chair of the Bipartisan HBCU Caucus, for getting the ball rolling on the effort to get Congress to allocate the special funding, and House Speaker Nancy Pelosi, a California Democrat, and Senate Minority Leader Chuck Schumer, a New York Democrat, for building support among lawmakers.

“The critical thing to note is that not only Democrats supported it but Republicans, too, people from the red states where some of our schools are located,” Williams said. “It sent a very strong message. That type of collaboration has been very crucial to helping our schools.”

Looking Ahead

Many of the HBCUS are still providing students and faculty with the tools and support they need to make distant learning systems effective and keep students on track academically. The stimulus funds will help these institutions continue building capacity as they continue adjusting and adapting to the current teaching and learning environment and adopt new models for getting the job done.

North Carolina A&T University, an HBCU that is part of the University of North Carolina system, is in a good position to do just that, said Harold L. Martin Sr., chancellor of the university.

Although the university reimbursed students $8 million in housing and meal plan fees, it did not break the bank.

"Fortunately, we had the funds available and were able to reimburse our students appropriately," Martin said. But the university will now put off planned renovations to housing and dinning facilities on campus. And while housing, dining and custodial staff will continue to be paid until the end of the year, he said there will be a modest number of layoffs afterward.

"We're fortunately a university that’s been growing for the past six to seven years," he said. "We have been very effective in being strategic in how we invest those dollars. But as we move into summer and next fall, we may see fewer dollars through our state legislature to fund operations and activities. We may experience potential budget cuts and are making provisions for that."

What's more, if the pandemic continues and students are still taking classes remotely next fall, the university will be unable to charge or collect the same tuition and fees as it did in prior years.

"That will have a negative impact on the university and will result in a revenue shortfall," he said. "We’re managing through various possible scenarios."

Williams, of the Thurgood Marshall fund, said his organization is having discussions with member institutions about "different scenario planning" depending on what fall enrollment looks like.

"I would assume that social distancing continues in the fall and changes the dynamic of what campuses look like," he said, adding that students will be expecting different tuition and fee rates if they're not on campus. "That’s the reality of where we are, and those adjustments are going to have to be made."

He said state funding for higher education will loom large in any scenario and the ramifications of the pandemic on state budgets are already becoming apparent.

In Missouri, home to two HBCUs -- Lincoln University, a public, land-grant institution, and Harris-Stowe State University, which is also a public institution -- funding for higher education will be significantly reduced under a $180 million spending freeze announced earlier this month, the St. Louis Post-Dispatch reported. The plan would restrict $61.3 million from four-year institutions and $11.6 million from community colleges, $81.6 million in all from the Department of Higher Education and Workforce Development, the Dispatch reported.

For Lincoln the freeze meant a $1.4 million budget cut.

"At the end of the day, there are going to be even more challenges because we don’t have the luxury of large endowments to keep our schools going," Williams said. "So states maintaining their level of support is also critical."

Perhaps the current reality explains why presidents and chancellors of the 19 land-grant HBCUs have asked Congress to expand federal Pell Grants for low-income students and "to fund nearly $1.5 billion in healthcare-related degree programs and technological upgrades at the schools as a stabilizing investment in pandemic recovery throughout the south," according to HBCU Digest.

The institutions understand that keeping students engaged and enrolled is tied as much to the livelihoods of the colleges as it is to that of their students.

"The more students we keep in school, the more students we help graduate, and the more students we move into the middle class," Williams said.

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