TAKING A HIT
College officials say funds for higher ed in virus deal fall short as some schools lose ‘staggering sums’
The $2 trillion stimulus package will send about $14 billion to colleges and universities that are hemorrhaging money as they close their campuses and try to stay afloat with distance learning.
But higher education leaders say that is far short of what they need in the face of an education crisis that is greater than any they have faced in a generation.
The deal will create a $30.75 billion education stabilization fund, 46 percent of which will go to higher education. That is a fraction of the $50 billion that higher education leaders said they needed.
Of that $30.75 billion, $13.5 billion will go to primary and secondary schools, which had requested at least $75 billion to help keep their systems intact with more than 55 million children out of school. Governors will receive about 10 percent of the fund, or about $3 billion, to put toward emergency education costs.
The deal will also allow borrowers to defer their federal student loan payments for six months, without penalty and without added interest costs. In a separate move, Education Secretary Betsy DeVos announced Wednesday that she will stop collecting payments and garnishing wages from borrowers who default on their loans. The Education Department will refund $1.8 billion to borrowers who had money seized by the government since March 13.
The funding for higher education is significantly higher than the $6 billion first proposed by Senate Republicans and is closer to the $15 billion proposed by House Democrats. But education leaders are hoping for more relief in additional bills that may emerge in the coming weeks.
“While this legislation is an improvement from where the Senate started, the amount of money it provides to students and higher education institutions remains woefully inadequate,” said Ted Mitchell, the president of the American Council on Education, which represents more than 1,700 colleges and universities.
In a memo, the council joined other associations representing virtually every school in the country to request at least $50 billion to help with student housing costs, other student expenditures and the damages universities are suffering from their shutdowns.
They also asked for a separate $7.8 billion to help with the costs of technology needed for digital learning.
Colleges were among the first institutions in the country to shut down operations amid the coronavirus outbreak, and shortly after the higher education sector’s bond rating was downgraded by Moody’s to negative from stable. “Universities face unprecedented enrollment uncertainty, risks to multiple revenue streams and potential material erosion in their balance sheets,” it said.
Already, schools are refunding tens of millions of dollars in costs for housing and food plans, struggling to pay salaries for faculty and staff members and incurring new costs associated with digital classrooms. And with the college admissions season this spring in flux, they cannot predict tuition revenue in the fall.
“Campuses are losing staggering sums,” Mitchell said. “If these needs are not met, students are going to suffer financially and may drop out.”
The bill ensures funding for the hardest-hit institutions, those that serve overwhelmingly low-income populations, with about $1 billion for historically black colleges and universities and other minority-serving institutions and tribal colleges.
Michael Lomax, the president of the United Negro College Fund, said the funding will help the schools move to digital platforms, adding, “thankfully, this time Congress remembered us.”
Public and private research universities joined medical schools and teaching hospitals in requesting an additional $13 billion for their research operations. The schools said they needed help paying staff members, such as postdoctoral students, and maintaining or shutting down laboratories. The bill contains $1.3 billion for research, about 10 percent of what they had asked for.
Four-year public research universities, which serve 5.8 million students and employ 1.1 million faculty members, conducted $52.8 billion in research in the 2018 fiscal year alone. Much of that was federally sponsored.
Peter McPherson, the president of the Association of Public and Land-Grant Universities, which represent nearly all public research institutions, noted that some member schools, such as the University of Washington, have helped fight the coronavirus.
“It’s an important enterprise and is, of course, particularly helpful right now,” McPherson said.
The stimulus funding will be critical for small and independent institutions that do not have the huge endowments of Ivy League schools or the government backing of large public universities.
The New Haven Independent reported this week that Quinnipiac University announced that it would temporarily cut pay for faculty and staff, citing “significant additional expenses for our university and lost revenues from programs that were canceled.”
Roger Casey, the president of McDaniel College in Maryland, which serves 3,000 students, said refunds and credits for food and housing would take $4 million from its budget of about $60 million.
“We’re hoping Congress can plug that hole for us, so that we can do right by our students and get that cash back in these families’ hands,” he said.