Universities are at risk of losing hundreds of millions of dollars as they look to future drops in tuition and accompanying income. In addition to their losses that have come from refunding student housing and other expenses when colleges were forced to close their campuses last month, predictions about fall tuition don’t look promising. Festivals, concerts, and sporting events aren’t happening either. A new book covering the topic estimated that 10% of America’s colleges were at risk of closing before the pandemic hit, but the author now predicts that nearly 20% of universities could have to close their doors.
University presidents are calling on another round of federal funds to buffer the financial blows they are experiencing and expecting. President of the American Council on Education said that Trump’s meager $14 billion allocated to higher education could force university closures. The Council had requested $50 billion. A Harvard University education department spokesman said contrary to what many think, university endowments cannot simply be tapped. He reported that 80% were donated for specific purposes, restricting use of those funds for operating expenses. Amidst intense scrutiny, a number of universities including Harvard, Princeton, and Stanford announced they will not accept stimulus money, leaving it to be distributed to smaller colleges. Other affluent universities such as Notre Dame and Cornell still plan to accept the funds.
The Right views the current educational upheaval as a long-overdue purge of what they consider to be a cesspool of liberal ideology. Not only that, but tax-payer funded liberal ideology. Current events are highlighting the flaws of many universities’ budgets, as well as demanding evaluation of which services and spending are actually essential. Many universities have miniscule margins, and Moody’s Investor Service showed that 30% were already operating with deficits. Some claim this is due to excess and unnecessary spending in areas such as lavish recreational centers and high-end science labs and dorms, as well as running programs that ultimately don’t benefit society.
I’m tired of hearing from university execs that “it wouldn’t be prudent” to tap their endowments in this crisis. Fine. But don’t come begging federal taxpayers for money while you sit on billions in endowment funds and students suffer— Josh Hawley (@HawleyMO) April 22, 2020
Other universities are sitting on billions of dollars of endowments. Missouri State Senator Josh Hawley Tweeted, “I’m tired of hearing from university execs that ‘it wouldn’t be prudent’ to tap their endowments in this crisis. Fine. But don’t come begging federal taxpayers for money while you sit on billions in endowment funds and students suffer.” Doctoral Researcher and columnist Sumantra Maitra states, “Our elite universities should either reform and restructure, or perish.”