New Survey Report: College and University Presidents Remain Cautiously Optimistic about Financial Fallout of COVID-19
In March, as colleges and universities faced the spread of an unprecedented pandemic, they worked in a state of triage to close their campuses, move classes online, and prepare for an uncertain future.
To understand what campuses were planning amid those sudden changes, AAC&U partnered with ABC Insights and rpk GROUP to survey members of the AAC&U Presidents’ Trust, a broad and diverse network of higher education leaders representing four-year public and private institutions and two-year community colleges. In that March survey, these presidents were “cautiously optimistic,” with most planning to “hunker down” and “weather the storm” by laying off administrative staff, implementing hiring freezes, and reexamining operational processes. While some presidents warned there may not be a quick “return to normal,” many hoped to avoid making cuts to academic programs.
Four months later, the storm has not ended. If anything, the winds have intensified and shifted directions. The killing of George Floyd in late May sparked a national movement for racial justice, resulting in levels of political protest not seen in the United States since the 1960s.
In July, AAC&U again partnered with ABC Insights to conduct a follow-up survey of Presidents’ Trust members. With the spring semester behind them, and with planning for the fall well underway, have college and university presidents changed their priorities in response to the pandemic? And how are they planning to respond to calls for racial justice within their institutions and on their campuses?
“College leaders across the country are engaged in comprehensive planning to ensure the safety of their communities while preparing to deliver a curriculum in the fall, whether in person or remotely, that positions students for success,” says AAC&U President Lynn Pasquerella. “One of the most compelling findings from AAC&U’s most recent survey is the percentage of leaders focused on issues of racial justice, reflecting a recognition that if higher education is to emerge strengthened by the ongoing crisis touched off by the COVID-19 pandemic, we must intentionally prioritize quality, equity, and inclusion in any of the possible futures ahead of us.”
Instead of operating in “panic mode,” most presidents are maintaining their cautious optimism as they look forward to the fall. Taken together, the findings signal a resolve on the part of presidents across the higher education landscape to protect students and the core educational mission of their institutions by avoiding tuition increases and cuts to academic programs, focusing instead on reductions in operational expenses and staffing. At the same time, presidents are expecting an increase in organized student activism this fall while making an array of long- and short-term plans to address racial injustice and systemic racism on their campuses.
“Presidents are facing a tsunami this fall—from COVID-19, the recession, and racial unrest,” said Paul Friga, University of North Carolina at Chapel Hill strategy professor and cofounder of ABC Insights. “Our survey reveals key actions universities must take related to transforming their entire operating model to maintain quality education for students but significantly decrease administrative and academic spending. I do fear that many presidents are underestimating the magnitude of the change needed, but I am optimistic that we can come out of this in a better place.”
Presidents Are Optimistic about Reopening Campus and Maintaining Enrollment
- In the July survey, 84 percent of presidents indicated that their institution intends to convene in-person classes at some point in the fall.
- The survey found that 61 percent of presidents expect a change in fall enrollment somewhere between a 5 percent increase and a 5 percent decrease. One in five presidents anticipate no changes in enrollment.
- “New student deposits and continuing student registrations are on par with last year,” one president said. “Students want to return, whether they will have the resources to actualize that interest is yet to be seen.”
Despite Revenue Losses, Presidents Hope to Avoid Raising Tuition or Changing Academic Programs
- In both the March and July surveys, most presidents (61 percent in March and 66 percent in July, respectively) anticipated revenue losses of between 5 and 15 percent.
- However, the percentage of presidents who anticipated a more severe decline in revenue (i.e., losses greater than 15 percent) dropped from 30 percent in March to just 10 percent in July.
- In July, the majority of presidents said they expect to maintain, rather than raise, tuition rates (85 percent, up from 81 percent in March).
- More presidents in July anticipated making no cuts to academic programs or faculty positions, a 10 percent increase since March (see figure 1).
Presidents Turn to Staff Layoffs, Hiring Freezes, and Reduced Administrative Salaries to Cut Costs
- Since March, the number of presidents who plan simply to “hunker down” dropped by 12 percent. Instead, a number of budget-friendly steps have emerged as counters to the “wait and see” strategy (see figure 2).
- The proportion of presidents who plan to lay off staff grew from 72 percent in March to 88 percent in July.
- And although the proportion of presidents who expect to implement a hiring freeze remained essentially unchanged from March to July (83 percent and 82 percent, respectively), the proportion of presidents who expect to cut administrative jobs jumped by 16 percentage points over the same period.
- Between March and July, the percentage of presidents planning to implement across-the-board budget cuts grew by 9 points (from 55 percent to 64 percent), and the number of presidents planning to cut benefits doubled (from 21 percent to 42 percent). Fifty-nine percent of presidents also expect to decrease pay for senior staff.
Presidents Anticipate Increase of Student Activism on Campus
- In addition to budget cuts to mitigate the financial impacts of the crisis, presidents are anticipating effects from the growing national movement for racial justice.
- The July survey found that, on average, 80 percent of presidents believe it is either “very likely” or “likely” that organized student activism will occur on their campuses in the fall.
- Presidents of large campuses with more than 15,000 students were much more likely to say that student activism is “very likely” this fall (see figure 3).
Presidents Outline Short- and Long-Term Plans to Address Racism and Racial Justice
- The presidents outlined several short-term measures, including hosting several town hall meetings, listening sessions, or focus groups, that are largely focused on communication with students, faculty, and staff.
- Long-term planning is focused on creating lasting, structural changes. Respondents cited long-term approaches ranging from strategic hiring and curriculum reform to broad interrogations of institutional practices and policies.