A Texas Civil Rights Report update on the COVID-19 impacts on college students and higher education.
The American Council on Education requests that the next COVID-19 rescue package from Congress provide at least $46.6 billion in relief for higher education, to be split equally between students and institutions.
Half of the $46.6 billion should be spent as “emergency grants to students” in the amount of $23.3 billion.
“In order to address these urgent needs, it is necessary for the federal government to provide these critical funds to students and campuses as rapidly as possible,” says the coalition of blue-ribbon organizations in an April 9 letter to US Speaker of the House Nancy Pelosi (D-CA) and Minority Leader Kevin McCarthy (R-CA).
Here is an extended excerpt from the letter (we added paragraph breaks and emphasis):
“The federal government has the sole ability to provide the type of assistance to students, their families, and institutions of higher education that will not only allow colleges and universities to meet the needs of our students and staff, but to continue as engines of local and regional economies.
“Efforts to stimulate the economy must necessarily include the nearly 4,000 degree-granting, two-year and four-year, public and private colleges and universities. These institutions educate roughly 20 million individuals, generate total revenues of about $650 billion (in 2016-17 according to Department of Education data) providing a corresponding economic impact in their communities, and employ nearly 4 million Americans across campuses in every state and congressional district.
“Supporting higher education at this moment is an essential component of growing the economy and preserving employment for tens of thousands of Americans in the public and private sectors. In 2018, the University of Notre Dame had a regional economic impact of $2.46 billion and supported 16,700 jobs. Another study showed that in 2018, the University of Georgia pumped $5.7 billion into that state’s economy.
“In a number of states, such as California, Iowa, and Maryland, universities are the largest employers. Individuals with a postsecondary education degree earn more, pay more taxes, and are more likely than others to be employed, according to the College Board’s Education Pays 2019. For instance, in 2018, the median earnings of bachelor’s degree recipients with no advanced degree working full time were $24,900 higher than those of high school graduates, and those individuals also paid an estimated $7,100 more in taxes.
“The benefits of a higher education are not simply economic. Having a college degree is associated with reduced unemployment, a healthier lifestyle, lower health care costs, and higher levels of civic engagement. Indeed, on any measure of wellness that demographers can devise, college graduates fare significantly better than those who did not go to college.
“Based on extensive conversations with our members and our colleague associations, we have prepared conservative estimates of the support needed to at least partially restore institutions. Many students and families will be earning less, and will have less available to spend on postsecondary education. For that reason, we estimate that a 20% increase in the current level of unmet need of nearly $60 billion will require an additional $12 billion in need-based financial aid.
“On the institutional side, we estimate that enrollment for the next academic year will drop by 15%, including a projected decline of 25% for international students, resulting in a revenue loss for institutions of $23 billion.
“Auxiliary services, which are not related to instruction but provide services to students, faculty, and others, including dormitories, food services, bookstores, health and recreation facilities, and the like, generate revenues for schools. These revenues support day-to-day operations including instruction, academic support, and student services. We estimate auxiliary revenues will decline by 25 percent, which is conservative relative to the numbers institutions have been reporting so far. In FY 2017, America’s colleges and universities realized $44.6 billion in auxiliary revenue, so the expected loss is $11.6 billion.
“All of this adds up to a total estimated need of $46.6 billion, which would be divided equally between students and institutions.
“Emergency grants to students totaling $23.3 billion will enable them to begin or continue their college educations. Similarly, institutions will be able to use their share to begin filling financial gaps created by the pandemic.
“It is important to note that these are conservative estimates, excluding numerous areas where institutions are facing additional challenges. We’ve excluded $374 billion in revenues—from sources such as charitable giving, hospital revenues, and investment income to name a few—from this calculation even though a large percentage will undoubtedly be lost. We also do not factor in the significant state disinvestment in higher education that is expected due to substantial financial pressure on states stemming from COVID-19. Accordingly, the figure of $46.6 billion represents just the floor of the overall impact confronting colleges and students as a result of the pandemic.
“To meet both existing needs and to ensure students and families have the resources to return to college in the fall, we propose that the funds continue to be split equally between institutions and students. However, we also request that the funds targeted to students in this supplemental bill be provided by institutions in the form of need-based financial aid, with sufficient flexibility to address sudden changes in students’ circumstances that arise from the economic downturn the pandemic has caused. . . .”
ACE letter to Pelosi, McCarthy (Apr. 9, 2020) archived below (pdf 113 KB)