When colleges first shut down more than 18 months ago in response to the coronavirus, it didn’t take long for the prognostications about higher education’s future to begin.
Sharp declines in enrollment, and in revenues from room and board, were imminent. Some students would sit out a year or transfer to institutions with cheaper tuition. And perhaps the most dire: The pandemic would be the death knell for institutions that, for years, had been barely hanging on.
How accurate were these crystal balls? Let’s test some of the most notable predictions against what the data now say about the 2020-21 academic year.
Enrollment could drop by 15 percent.
In the early weeks of the pandemic, the American Council on Education tried to quantify the coronavirus’s potential impact on colleges. After gathering information from its members and from dozens of other higher-education associations, the council laid out an appeal for the sector in letters to the U.S. House of Representatives and Senate in April 2020. Among the many challenges that the council anticipated was a 15-percent drop in enrollment in 2020-21.
Preliminary data from the U.S. Department of Education released last month show that enrollment did indeed decline, although not as sharply as predicted. Enrollment was down by 2.4 percent for all undergraduate and graduate students at public and private colleges in the fall of 2020.
But what happened with first-time, full-time undergraduate students — whose numbers drive enrollment each year — is perhaps more telling. In the fall of 2020, enrollment for those students at public and private four-year institutions and for public two-year institutions fell 7.9 percent from a year earlier. But there was wide variation among institution types.
The steepest decline in first-time, full-time students was among public associate-degree-granting colleges, at 16.5 percent. Other sectors experienced losses, but weren’t hit as hard.
Revenue from auxiliary services will plummet.
The mass exodus of students from campuses led to reports of huge losses in room-and-board revenue. Those fees, and money from other auxiliary services, such as bookstores and health and recreation facilities, are an important revenue stream for many colleges. Federal higher-education data shows that colleges were correct to fear that their revenue streams would be disrupted.
In the 2020 fiscal year, which ended June 30, 2020, and captures only the first few months of the pandemic, auxiliary-services revenue at public and private four-year colleges declined 13.4 percent, or $6.2 billion from a year earlier.
The picture was worse for private colleges, where auxiliary-services revenue fell 16.7 percent, to $15.3 billion, in the 2020 fiscal year. Private institutions with sizable auxiliary revenues, of $10 million or more, in the previous fiscal year — such as Boston, Duke, and Stanford Universities — fueled the decline for that group.
Public colleges’ auxiliary-services revenue losses weren’t as steep. In the 2020 fiscal year, they had auxiliary-services revenue of $24.5 billion, a decrease of 11.2 percent, or $3.1 billion.
The early signs of financial trouble spurred federal efforts to prop up higher education. Some institutions blunted their losses by using these federal funds to reimburse themselves for the refunds they paid to students for their room-and-board fees.
Students will start their postsecondary education at community colleges, or transfer to them to save money.
Driving this prediction was the idea that some students would choose to skip what was then sure to be a less-than-ideal residential-college experience — one that, for the most part, would still have a pre-pandemic price tag. But community colleges bore the brunt of higher ed’s enrollment losses last year, and it appears that attending a public two-year college initially, or after being enrolled at a four-year institution, wasn’t a path that many students took.
Federal data on transfer students doesn’t tell us the type of institution a student transferred from. But full-time undergraduate transfer-student enrollment at public associate-degree colleges dropped by 18.8 percent in the fall of 2020 from a year earlier, which suggests that institutions didn’t see a jump in that population due to the pandemic.
More students will enroll at in-state colleges to stay closer to home and save money.
One way to test this assumption is to look at how many first-time, full-time degree-seeking students from a particular state went to any public four-year college in the fall of 2020 — and what share of that group selected an institution in their home state.
For instance, of the 44,052 recent high-school graduates from Georgia who went to a public four-year college — baccalaureate, master’s, or doctoral — in the fall of 2020, most, or 88 percent, went to one that was in state. That’s a 3.2-percentage-point increase from the year before. Hawaii also saw an increase, of 5.8 percentage points, in students from the state attending public four-year colleges in Hawaii.
Some states, however, saw decreases. Of the 22,846 students from Pennsylvania who went to a public four-year college in the fall of 2020, 74.1 percent of them went to one that was in state — a 7.3-point decline from the year before. Other states whose decreases were among the worst: the District of Columbia, 5.9 points; Alaska, 4.8 points, and Maine, 2.5 points.
Some colleges won’t survive the pandemic.
This is a common prediction, particularly for small private colleges, when a crisis occurs that can torpedo colleges’ finances. The pandemic — a public-health emergency that triggered an economic downturn — was no different.
Yet, according to Chronicle reporting, only 13 colleges have closed their doors, merged with, or been acquired by another institution since the pandemic began, which is in line with past years. In some cases, the impact of Covid-19 merely accelerated a trajectory that was already underway.
MacMurray College’s closure is one example. The 174-year-old institution announced in late March 2020 that it would close two months later. The college said in a statement on its website at the time that the pandemic “complicated MacMurray’s financial condition” but wasn’t the main reason for the college’s closure. The Illinois campus was auctioned off almost a year ago.
With another academic year in the shadow of the pandemic now underway, it’s possible that more colleges will follow suit. Some higher-education observers say that popular cost-control strategies — hiring freezes, furloughs, and no-travel policies — are short-term solutions.
“Higher ed is hurting. Our entire operating model is under siege, the revenue losses are unprecedented, and campus leaders are beginning to respond to the historic challenges,” Paul N. Friga, a clinical associate professor of strategy at the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill, wrote in an essay for The Chronicle in February. “They are realizing that cost-cutting alone is not the answer, and that this is a time to clarify their institution’s unique value to their students and communities.”
— Dan Bauman contributed to this report.