As COVID-19 turns everything upside down in retail, travel, hospitality, and other industries, it’s easy for the general public to forget about higher education. But these institutions — whether public or private — are facing a huge reckoning day this fall.
With virtual graduations and commencements taking place nationwide, it’s hard to believe the opening of school is barely more than three months away. Normally, colleges and universities have a pretty solid system in place to transition from one academic year to the next. It’s a lot of work, but nothing like what it will be this year.
Looming over everything is the prospect of massive budget shortfalls and bankruptcy. Schools that decide to open this fall face the double challenge of ensuring everyone’s safety while navigating the unpredictable and fluid costs associated with the necessary adjustments. Schools that close face the double challenge of ensuring financial solvency while navigating the changes needed for remote instruction and interaction. Gone are myriad streams of income — parking, dining halls, housing, shopping, sports, arts events, and much more. And will students and parents pony up for a “lesser” learning experience?
No one knows for sure how any of this will play out.
And against that backdrop, some experts don’t have high expectations. As economics professor Dr. Richard Vedder states in his Forbes piece, we may be looking at hundreds or perhaps 1,000+ colleges and universities going under.
That’s crazy to think. But not as crazy as to think it can’t happen.
As Dr. Vedder points out, many of these higher institutions were not on solid financial ground before this virus hit. Like many of their former students who are deeply in college debt, they were existing “paycheck to paycheck” with little to nothing in the bank in case of emergency.
Isn’t it ironic? Don’tcha think?
Many of these same hallowed halls of education that pushed and prodded — or at least eagerly encouraged — millions of people into mountains of student debt are now facing their own financial crises.
To be clear, this isn’t written with glee. Such academic closures would be a huge price to pay. And it will fall largely on the backs of countless people besides those who reaped financial rewards from tuitions tripling over the past 20 years — maintenance people, office staff, teaching assistants, food workers, part-time faculty, and many more.
It’s hard to escape the smell of karma in this. Economic experts and advocates have implored Big Education (let’s call it that) since the late ’90s to rein in tuition and spending. But it didn’t. The money flowed like water through easy government-backed loans. (Hmm… sounds like the mortgage crisis of 2008….) The student-debt crisis kept growing. And worst of all, predatory colleges popped up like weeds.
Again, no one knows for sure how all this will play out. One thing’s for sure, though — COVID-19 is exposing an ever-increasing number of major problems in our society and economy. From income inequity to political division, from healthcare horrors to the fragile food chain, from the waste of commuting to underpaid public school teachers… it’s all now in the light.
Can part of the many fixes be scholarships for people out of college?
Student debt won’t likely go away, no matter what forgiveness program Congress may pass. Front-line health workers will still face their student loan payments. As will grocery employees, pharmacists, and dentists. And all those employees and contractors at colleges and universities that shut down? Most of them carry student debt.
Bailouts, payouts, and programs won’t be able to help all of this. We’ll all be in this together, on all sides.
Which is exactly why scholarships for people out of college will be more necessary than ever.