This is the season when small college campuses across the nation are supposed to be full of potential students peering into classrooms, eating lunch in the dining hall, spending the night in dorms and being wowed by interactions between faculty and students.
Instead, campuses are mostly empty, not only of prospective students, but also already enrolled students. Not having the ability to draw high schoolers to campus means admissions counselors find themselves tied to computers, doing video chats as they extol the virtues of their campus.
No one knows whether video chats and virtual tours will generate the same level of application and enrollment as in-person strolls. The answer will have enormous impact on small liberal arts colleges across the nation, many operating close to the margin already.
“Just going online has a cost,” said Shirley Hoogstra, president of Council for Christian Colleges & Universities, a group of 180 mostly small schools from the U.S. and overseas. “If you are a residential college, you have to figure out what would be a fair repayment to students who are no longer living on campus. There will be additional cleaning costs. It will increase the financial burden on these schools.”
For colleges already on the brink, waves of economic bad news could have dire consequences.
It’s not just small colleges:In two weeks, the future of college has become uncertain, thanks to coronavirus
First is the short-term hit: Students are leaving residence halls in droves as colleges ask all but those truly unable to go home to pack up. Colleges are being called on to issue refunds, which could total in the millions of dollars for some larger liberal arts colleges. Schools are facing unexpected costs as they try to switch their entire classroom instruction apparatus to online-only. That’s a particular challenge for small liberal arts colleges, whose calling cards are face-to-face relationships between faculty and students.
Then the second wave: What if summer sessions are out? That could remove millions more in tuition revenue and housing money. Small, private liberal arts colleges are extremely tuition-dependent.
Then the third wave will hit. Nobody knows how long the forced disruption will last, how deep a recession will be and how many students won’t be on college campuses come fall. On a campus with only 1,400 students — like many scattered across the nation — a loss of even 50 students from projected classes could cause a major dip in revenue.
“I fear that this recession will have a major impact on institutions across the country,” said Jeff Abernathy, president of Alma College, which enrolls just under 1,500 students in mid-Michigan.
Many of the nation’s small liberal arts colleges and universities are in small, rural towns. Hardship for the schools can extend to the whole town.
“Think of all the ways 1,500 or 2,000 or 4,000 students affect the local economy,” Hoogstra said. “Not having those students in town or the events is going to cause issues beyond just the college.”
With demographers showing a shrinking number of high schoolers for several years to come, and with rising concerns about tuition costs, these small colleges were already facing tough competition for students. Many presidents already had concerns about the financial future of their schools.
Looking out the window from his office, Mauri Ditzler can’t see many people out and about on Albion College’s campus. There’s a couple of maintenance men out working on a project, but no students.
But the campus, located in south-central Michigan about 95 miles west of Detroit, isn’t empty. As he walked the campus Tuesday morning, Ditzler, the school’s president, could see cars parked outside the small private liberal arts college’s residence halls. At that point, about 400 or so of the school’s 1,400 students had told the college, which had switched to online-only instruction, they would be leaving. Albion was providing grab-and-go meals after Michigan Gov. Gretchen Whitmer ordered restaurants to close for all but carryout or delivery.
A day later, at 4 p.m. Wednesday, Ditzler sent a note to students, encouraging them either to move home or settle in for the long haul.
“If you are on campus, but plan to depart in the coming days, I encourage you to expedite your departure and to take all of your belongings with you as if a return to campus may not be possible before the end of the semester. It is possible that if a shelter-in-place order comes that travel restrictions will be implemented, making travel home no longer an option.”
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At Alma College, 100 miles north from Albion, a similar scene had played out. There, 96% of the school’s 1,440 students live in residence halls.
“The students are leaving by the hundreds each day,” said Abernathy, the president.
Alma is giving a $25 per day refund to students as they leave. The refunds could run Alma an estimated $800,000. The college runs on a different schedule than most. Its semester ends in mid-April with commencement. Commencement isn’t happening this year. Then it starts a May term.
If the school can’t run that, then it will again lose revenue — both from anyone not taking classes and from students not living on campus.
“We have been prepared. We have reserve funds. Our donors will step up,” Abernathy said. “But it will be a big challenge for us.”
On Wednesday, Moody’s Investment Service downgraded the entire higher education sector from stable to negative.
“Just over 30% of public universities and nearly 30% of private universities were already running operating deficits,” the service wrote in its guidance. Slightly over 5% of private colleges across the nation have 90 days or more of cash on hand to absorb any short-term losses, Moody’s said.
“While public universities will face similar stresses to privates, those that are significantly struggling benefit from potential state support,” Moody’s wrote. “Private universities do not have this layer of additional oversight, support or potential (cash) infusion.”
In addition to losses in money coming in from housing, Moody’s said, universities are also having to spend more on online learning and emergency management. They are also losing money from the cancellation of study-abroad programs andathletic events.
Add in losses in investments and investment revenue, and universities could be facing a crisis in the next couple of months.
“I think colleges are in full-out emergency mode,” said Robert Kelchen, a higher education finance professor at Seton Hall University. “They are making decisions and trying to conserve resources for major decisions that will have to be made down the way.”
Decisions, decisions, decisions
Tim Gibson understands making decisions under pressure. As an Air Force pilot who rose in the ranks until his retirement as a one-star general, Gibson learned the OODA (Observe-Orient-Decide-Act) loop decision making process.
It’s a process he’s engaged in now as the president of the 500-student The King’s College in the financial district of New York City.
“You want to have a really quick OODA loop,” he said, something that’s been put to the test in this crisis. The college’s original plan was to take spring break as planned this week and then start online instruction. Students at The King’s College live in apartments the college rents in New York and then sublets to them. But that had to change. So the school went online March 11, giving a couple of days of instruction online before break. Then faculty could use the break to tweak their classes based on what happened those first few days.
“We are trying to think through all the areas and see what needs adjusting,” Gibson said. That’s tough, because everything is up in the air.
At Wheaton College, a liberal arts school of over 2,000 students in the Chicago area, decisions have been coming left and right.
“It’s very fluid,” President Philip Ryken said. “This touches every area of campus.”
Small liberal arts schools are largely residential schools, with most having more than 90% of their students living on campus. So presidents had to ponder safety — could they protect students’ health better on campus, or by sending them home? And once they made the decision to close residence halls to all but those who had nowhere else to go — international students or others with no permanent home other than the school — they had to decide whether to issue refunds.
“We felt that in all fairness that if students were not living with us and dining with us, it was not right to retain those revenues,” Ryken said. “This whole situation is going to be very costly. This is going to be extremely challenging.”
The timing of the decision to go online and to close residential halls, and all the moves in between, had to be carefully done.
“If you do it too soon, you lose credibility,” said Calvin University President Michael Le Roy. Calvin, in Grand Rapids, Michigan, has about 3,600 students. “Too slowly and you aren’t prepared.”
Cornerstone University, a private Grand Rapids college of about 1,200 undergraduate students and 2,200 total students including adult education and its seminary, is supposed to be having visit days shortly for high school juniors starting the college process. Instead, admissions counselors are doing one-on-one video calls with prospective students.
Among the things that normally get shown off on such visits are what a small school brings to the table.
“The beauty of a small school is those mentor relationships between faculty and students,” said Bob Sack, the school’s vice president for advancement. “That’s really the hallmark of places like Cornerstone.”
“We are really coming down the home stretch now for the recruiting process. Most (high school) seniors have already visited, but they might want to come back for one more visit. (High school) juniors are coming. We relish the opportunity to have them on our campus, but we can’t. We still have our admission staff working.”
But presidents admit they don’t know what is coming.
“It’s still a guess what will happen,” Le Roy, the Calvin president, said. “What job losses will there be? Will students and their families be able to make tuition payments? We are very concerned what this means about enrollment in the future.
“We have sufficient reserves, but (Calvin) could very well look different in the future. We could have to scale back. If revenues are down, we are going to have to make those adjustments. We just don’t know what will happen.”
A pandemic wasn’t on Matthew Scogin’s plan for his first year as president of Hope College, where he had been a student and later a board member.
Scogin had planned to use the year — his first as a university administrator — to dive deeply into Hope, a school of about 3,000 in Holland in west Michigan.
But Scogin, who worked at the U.S. Treasury Department and the New York Stock Exchange during the Great Recession and its aftermath, said he’s optimistic about what’s ahead.
“It’s been crazy, but I feel even more so that God called me to this,” Scogin said. Hope has its roots in the Reformed Church of America. “The craziest part has been the uncertainty. The unknown questions and answers.”
Like other small colleges, Hope has never done remote delivery of instruction.
“We’re going to learn a lot from this,” Scogin said.
There will be financial pain. Giving pro-rated credit to students who have paid for meals and the residence halls but aren’t living there is going to cost Hope millions of dollars, Scogin said.
“There is no doubt we will take a significant hit to the budget. We don’t know how much. We don’t know in what areas we will lose, even. We are guaranteeing full pay to everyone, even if they have to reduce hours.
“The good news is we will learn a lot. I’ve been focusing our campus on the future of learning, the future of the workplace and the future of higher education. I’m excited by the opportunity to learn about each of these areas.
“There’s going to be difficulties. I want us to be people of Hope.”
Follow David Jesse on Twitter: @reporterdavidj
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