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Study: Some Colleges Might ‘Sink’ Without Federal Funds

June 8, 2022

A new study released by S&P Global found that some institutions benefited more than others from one-time emergency funding from the federal government during the pandemic. However, these colleges might be the ones that struggle the most to cover costs once the funding runs out.

The colleges that were found to benefit most from one-time emergency funding were those with high numbers of Pell-eligible students, historically Black colleges, colleges with small losses to auxiliary-related revenue, and colleges that qualified for Paycheck Protection Program loans.

The study found that many of these institutions that received higher amounts of federal emergency funding might have to raise expenses to maintain operations in fiscal year 2023 without new federal funding to offset costs they were able to use such funding for in fiscal year 2022.

As a possible solution, the study said, “schools that can raise tuition to offset these increases with little impact on enrollment will likely manage through inflationary pressures but schools with less flexibility will likely see operational pressures without new federal funds to offset costs.”

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Meghan Brink

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