Preliminary institutional estimates place the revenue losses due to the coronavirus at $1.7 billion ... [+]
The economic devastation from the coronavirus pandemic already is estimated to top $1.7 billion at the Big Ten universities, which include some of the nation’s leading public research institutions. And according to the universities’ leaders that figure will grow in the months to come. If the universities are unable to resume something close to normal on-campus operations in the fall semester, the next fiscal year could be as bad or worse.
Preliminary estimates - often couched as a range of possible impacts - were available for 12 of the 14 conference institutions (I did not find an estimate for Purdue, and I derived one for Indiana University). The figures are not always comparable because of different methods university officials used to arrive at their estimates. Almost all of the institutions included refunded room and board revenue in their numbers. Several added in un-budgeted costs for changes in operations such as transitioning instruction to on-line delivery, losing athletic and other event income, and reducing activities at academic health centers.
In some cases, the calculations include reduced appropriations from the state, in others, they do not. Some officials based their numbers on anticipated losses into the summer and the fall from lower enrollments; others did not include those estimates.
The projected losses are as follows, with a link to the press account or official announcement of each university’s estimate.
Indiana University - announced a 5% reduction in the upcoming fiscal year’s general fund budget totaling $85 million across its several campuses to help offset revenue losses. (Not all that reduction is at the IU flagship in Bloomington, for which I could not find a campus-specific figure. I arbitrarily assigned half that number, or $42.5 million, to IU Bloomington, which most likely underestimates its all-funds loss.) The Board of Trustees recently authorized IU to borrow up to $ one billion to cover potential losses due to the virus.
Michigan State University - $60 million.
Northwestern University - $25 million just in Spring semester room and board refunds.
Ohio State University - $35 million just in housing, dining and recreational feed refunds.
Pennsylvania State University - $260 million.
Rutgers University - $200 million.
University of Illinois - $71 million.
University of Iowa - $76 million, plus another $70 million from its hospital.
University of Maryland - $80 million.
University of Michigan - $400 million up to $ one billion for all three campuses (Ann Arbor, Dearborn, Flint) and Michigan Medicine. (I used the $400 million figure for the Ann Arbor campus.)
University of Minnesota -up to $300 million.
University of Nebraska - at least $50 million.
University of Wisconsin - $100 million.
Like other colleges and universities, the Big 10 schools will receive one-time relief from their share of the $14 billion provided to higher education through the federal CARES Act. The Big 10 schools were allocated more than $425 million in total, but only half of that is available to recover institutional costs, leaving about $1.5 billion and mounting yet to be managed.
That is an astounding figure, and remember it includes nothing from Purdue and the low-end $400 million estimate for the University of Michigan’s loss. Whatever the current figure, it is likely to underestimate the ultimate cumulative impact. Add in the losses - many smaller, but others larger - at thousands of institutions across the country, and the financial implications of COVID-19 for higher education begin to become more clear. They are a staggering sign of the hard times yet to come.
