Some colleges struggle during COVID-19 pandemic

Colleges and universities could face long-lasting impacts from the coronavirus.

Some colleges and universities across the country are taking major hits refunding money to students for housing, dining and parking, and it’s making some college leaders worried that even if campuses are allowed to reopen in the fall, that some students won’t be able to afford to return.

“The inability for a college to quickly reduce expenditures again, combined with the lack of revenue, loss of revenue could severely impact budgets and quickly,” said Michael Osborn, Vice President and Senior Analyst for Moody’s Investors Service.

The outlook for higher education has downgraded from stable to negative, according to Moody’s Investors Service, which expects that universities will face unprecedented enrollment uncertainty for fiscal year 20-21 -- along with significant financial challenges, including potential losses of tuition revenue, state funding, endowment income and gifts.

“Schools that are smaller in scope, maybe they have more of a local or regional reputation and they primarily rely on student charges for their revenue,” Osborn said. “They’re going to be the most impacted. And those schools were already feeling the pinch prior to this, so this just exacerbates problems that may have already existed.”

Osborn says some of those schools may consider awarding additional financial aid to entice students to enroll.

“The large comprehensive universities have a diverse revenue streams, they have a lot of scope and scale to their operations, they have a lot of student demand, both regional and national and global. So they’re set up for success during something like this,” he said.

Osborn says among those schools set up to fair well despite the pandemic is the University of Chicago. There, a group of students called “UChicago for Fair Tuition” have petitioned the university to cut their tuition in half for as long as the coronavirus crisis continues.

“I was hearing from close friends of mine, people I really care about that they were choosing between things like coming back to school and paying for food and paying for books,” said Livia Miller of UChicago for Fair Tuition.

Moody's Investors Service says a recovery in the financial markets could change the higher education outlook.