Colleges Petition Congress For $120 Billion for Coronavirus Relief Bill

A coalition of U.S. colleges and universities is urging Congress to pass a new coronavirus relief bill with at least $120 billion for higher education, saying the sector faces a crisis of “almost unimaginable” scale. As the coronavirus pandemic continues, its financial impact on American colleges and universities is now estimated to substantially exceed $120 billion. That’s according to the recent letter from the American Council of Education (ACE) and dozens of other organizations representing the nation’s two- and four-year colleges.

In April 2020, Congress earmarked nearly $14 billion for higher ed in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Almost all of that sum, about $12.5 billion, went to institutions directly, according to the National Association of Student Financial Aid Administrators. Institutions were supposed to pass on at least half of the $12.5 billion to students through emergency financial aide. In April 2020, after the funds were allocated, the American Council on Education, called the money allocated in the CARES Act “woefully inadequate” and said schools would need about $46.6 billion more.

In July, 2020, the Institute for College Access and Success looked at Colleges’ Compliance With and Use of Federal CARES Act Emergency Grants: A Look at 100 Colleges. The Institute’s analysis revealed, “that many colleges are not compliant with requirements to post information about how resources are being spent, and highlights variation in how funds are being spent at colleges where information is available.“

The most recent letter signed by the American Council on Education and 100 other groups says financial losses caused by the pandemic are far worse than schools had expected. Colleges have laid off thousands of workers to cut costs, but the letter says the pared-down operations will unsustainable without additional federal help.

In their letter, the education leaders stated, “Previously, our associations calculated that the financial impact of the pandemic on students and institutions would total at least $120 billion. Now, roughly one month into the fall semester, our members are reporting that their revenue losses and new costs have already greatly exceeded this amount, especially in areas such as testing, contact tracing, quarantine, treatment, and learning technology. For their part, many of our students and their families are struggling with reduced incomes and job losses, resulting in the need for billions of dollars in increased student aid.”

Colleges have had to increase financial aid to help students who are struggling to pay tuition, and schools have lost revenue from closed dorms and dining halls. In 2017–18, total revenues at degree-granting postsecondary institutions in the United States were $671 billion (in current dollars). Total revenues were $409 billion at public institutions, $248 billion at private nonprofit institutions, and $13 billion at private for-profit institutions.

In December, the University of Delaware announced it faced a deficit of $250 million and would be forced into measures including layoffs, furloughs, and reductions in retirement benefits. Rutgers University announced that all adjunct faculty in its writing department on the New Brunswick campus would be facing layoffs in 2021. This triggered protests from the part-time faculty union.

Enrollments have also decreased amid the pandemic, with a 13 percent drop in freshmen across all U.S. institutions. At the same time, many states have cut their higher education budgets.