Iowa universities face uncertain future as they lose $190 million to COVID-19
Dulce Escorcia, 20, of Iowa City, fears she will not have enough money to return to school in the fall and is calling on the Iowa Board of Regents to issue a full tuition refund to students. (Photo submitted by Dulce Escorcia)
Dulce Escorcia is one of the many Iowa college students who is questioning their return to school in the fall.
Escorcia, 20, of Iowa City, has been studying English and education at the University of Iowa.
But Escorcia also come from a low-income family and lives at home. Because of COVID-19, Escorcia and their mother both lost their jobs, leaving them even more financially stressed.
“I’m really unsure, anxious and angry about it all because I don’t know how I can afford to come back next year or even this semester with everything else is going on,” Escorcia said.
College students and graduating high school seniors are questioning their decision to go to school in fall 2020, according to a survey by SimpsonScarborough, a higher education marketing firm.
Surveys of young adults in March and April showed that 10% of high school seniors who planned to attend a four-year school will now attend a local community college or not pursue a degree at all.
In late March, 14% of current college students indicated they were not returning to school in the fall or it was “too soon to tell,” according to the survey. By April, that number jumped to 26% because of uncertainties caused by the COVID-19 pandemic.
For non-white students like Escorcia, the numbers are even worse: 41% of high school seniors and 32% of college students said they’re unsure of their plans or will no longer go to college. In comparison to their white peers, only 24% of high school students and 22% of college students said their plans have changed.
And enrollment projections are still unclear for international students, who bring much-needed revenue and pay full tuition.
This could mean trouble in Iowa, where its three public universities are already experiencing enrollment declines.
During the Iowa Board of Regents meeting on April 30, school officials from the University of Northern Iowa, Iowa State University and University of Iowa were already seeing financial stress due to unexpected costs related to COVID-19 and an expected drop in summer and fall enrollment.
Board of Regents President Michael Richards suggested freezing tuition for fall 2020 due to the financial difficulties students may be facing. He also recommended potential consolidations, including allowing students to take online classes from all three schools, sharing administrators among the universities and placing a moratorium on new construction.
“At this time we don’t know yet what financial toll this pandemic will have on our institutions, but we know it’s significant,” Richards said.
Iowa’s universities expect to lose millions of dollars
Iowa’s public universities are planning on reopening and fully operating in the fall, but revenue projections and potential declines in enrollment will create financial turbulence for these institutions.
Iowa State indicated it’s expecting to lose $88 million due to lost revenues and refunds from March through the summer. University of Iowa is expecting to lose a little more than $76 million and another $70 million from its hospital. The University of Northern Iowa is expecting to lose $28 million.
For now, ISU, UNI and UI are expecting steady enrollment for returning students in the fall. UI President Bruce Harreld said there are indications the university could lose 9-10% of expected incoming freshmen and have closer to 4,500 students instead of 5,000. ISU President Wendy Wintersteen also said her university is expecting a downturn in undergraduates.
Financial aid applications in Iowa are an indicator of students’ intent to attend college. As of April 20, there was a 0.5% decrease in applications in comparison to the same date last year.
While all of the universities are receiving aid from the federal government through the CARES Act, Harreld said they also need significant support from state lawmakers.
It’s unclear yet how much the Iowa Legislature plans to appropriate for the universities. The legislative session is expected to remain suspended until at least May 15.
“Without strong, financial commitment from our state, it’s difficult to maintain the excellence you and Iowans expect from us,” Harreld said.
Grinnell College, a private non-profit institution, issued millions in refunds to students and is planning multiple budgets to account for surface-level cuts or major reductions once expectations for the fall become clearer, according to a statement from its president.
But the school also has one of the largest endowments in the entire country at $2 billion, leaving it at a stronger financial standing than in comparison to other schools like Iowa Wesleyan College, which has experienced financial challenges in the past. In their last update to students on March 19, school officials indicated they were waiting for updates on their own funding from their insurance company and government agencies before offering refunds.
The financial viability of private colleges will depend on the strength of their endowments prior to COVID-19, said Elizabeth Sedrel of Iowa College Aid, a state agency that helps students seek a higher education.
That will be difficult for some schools, particularly if 10-15% of potential incoming students choose not to enroll in the fall.
“There will be schools in a position to take it and move forward and some schools, that might not be something they can absorb and come out financially solvent,” Sedrel said.
Students facing financial hardships themselves
As a junior entering senior year, Escorcia is close to reaching their bachelor’s degree, but the struggles of helping their family get through COVID-19 have dampened their expectation of returning in the fall.
So far, Escorcia feels like the Board of Regents has only offered “short-term” solutions when low-income students need more substantial assistance. Escorcia, who is now taking online classes, wants a full tuition reimbursement and a reduction in fees and costs for next year.
“I’m mad because I’ve done so much, I already sacrificed so much to get where I am right now to get into college,” Escorcia said. “Even if we’re back on campus in August, we’re still going to see effects from what’s going on right now.”
Jarod Cheng, 19, of Maryland attends the University of Iowa and his family expects him to pay for his own tuition. Because he doesn’t qualify for financial aid, Cheng has taken out at least $26,000 in loans to attend school, where he hopes to be accepted into the writers’ workshop.
The university didn’t issue a full refund and he lost his on-campus job due to COVID-19. Now, he wants the Board of Regents to freeze tuition for at least two years to better accommodate students like him who may be financially struggling.
As uncertainty rises, he says he wonders whether he should go back to waiting tables for the time being.
“Universities are going to lose a lot of faith if they don’t listen to student concerns,” Cheng said.
The Board of Regents will hold a special meeting May 4 to discuss freezing tuition and it will vote on the rates June 4.
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