Universities and colleges in the United States lost a total of $183 billion due to the COVID-19 pandemic, a research published in The Chronicle of Higher Education found.
According to the research that obtained “publicly announced revenue and budget news” from 107 institutions from the top 400 universities and the top 100 liberal arts colleges listed in U.S. News & World Report, the higher education sector is facing its “biggest financial losses.”
The research revealed that the institutions lost $85 billion in revenues, $24 billion for pandemic-related expenses, and $74 billion in expected future decline in state funding, which all add up to $183 billion.
“The institutions we tracked averaged an estimated 14-percent aggregate decline in revenues across fiscal years 2020 and 2021, and further losses loom as drops in enrollment, tuition freezes, and COVID-related expenses continue,” Paul Friga, clinical associate professor at the University of North Carolina, wrote.
However, the research warned that the “14-percent average revenue-decline estimate may even be overly optimistic,” suggesting that the actual number could be lower.
The study cited that several state legislatures have not adjusted the budgets for higher education “to account for the new reality” of the pandemic.
Meanwhile, for those that have made budget adjustments, they showed early signs that were “not positive,” the research said, citing a decline in state support due to lower tax revenues and increase in healthcare costs.
The research noted that its data are early estimates focusing on the revenue losses and COVID-19 expenses and that the actual numbers will only be known once fiscal year 2021 ends, usually in June. It also noted that numbers may change over time as new public estimates emerge.
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