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Colleges Face Financial Crisis As They Struggle To Operate In A Pandemic


Colleges are making cuts and tradeoffs amid this pandemic that are upending campuses. Amanda Aronczyk with our Planet Money podcast has that story.

AMANDA ARONCZYK, BYLINE: A month ago, Shreya Patel got an email from Rutgers University in New Jersey, where she's a senior.

SHREYA PATEL: They sent out an email announcing that everything was going to be remote. But that email really did not include anything about tuition - if it would be going down or anything like that.

ARONCZYK: She's like, wait. My department is going totally remote this fall? Shouldn't that mean I get a price reduction?

PATEL: And the answer was no.

ARONCZYK: Patel looks at a breakdown of the bill and sees that she's being charged $1,347 for a campus fee. And she's thinking, I might not even see campus this fall. So that afternoon, she starts an online petition demanding that Rutgers cut tuition and fees. Within four days, it has more than 25,000 signatures.

PATEL: Yeah, that's actually crazy. I definitely did not expect that many people to sign it.

ARONCZYK: Rutgers has had a tumultuous few months. Aside from multiple petitions, there were protests and even lawsuits against the administration. Every decision is being scrutinized, from dollars spent on the football team to layoffs in the dining hall.

ROBERT KELCHON: Rutgers is in a tough spot managing their finances.

ARONCZYK: This is Robert Kelchon. He's an associate professor of higher education at Seton Hall University in New Jersey.

KELCHON: They don't have as much flexibility as many colleges. Most of their employees are part of a union. And that makes it difficult to lay people off.

ARONCZYK: Layoffs are happening at colleges all over the country. Kelchon says that's because all sources of funding are taking a hit - tuition, state dollars, endowments, donations and auxiliary revenues, which means dorms and meal plans and the money sports teams make. And some of those sources of funding require real, live, in-person students. However...

KELCHON: Being on campus will be something like living in a monastery or a minimum security prison.

ARONCZYK: Students are likely to be stuck alone in their dorm rooms. And when they do go out, they'll be monitored and tracked. But still, colleges have been promising some in-person school and keeping that line long enough to ensure that students don't transfer, defer or drop out.

KELCHON: There are going to be a lot of really upset students and families in a couple of weeks when more colleges say, oh, sorry, we have to go online for the fall, even though they were telling students for months that they would be in person.

ARONCZYK: And that's what's going to happen.

KELCHON: I have a hard time seeing a way around it for most colleges. College campuses are almost like cruise ships in terms of density and putting people together.

ARONCZYK: They're both fun with organized activities, maybe some bad decision making but also petri dishes of humanity. For some, that is a tough sell right now. So there's likely to be lower enrollment, plus less auxiliary revenues. So colleges say that they're struggling. Rutgers did not want to do an interview, but they sent an update. The college got a new president July 1. And almost immediately, he notified students of a reduction in their campus fees. Here's Shreya Patel again.

PATEL: They cut 15% off of the campus fees.

ARONCZYK: That's a savings of $202.05 off an $8,000 price tag for the semester.

PATEL: That means they saw the petition. They saw all those students, you know, demanding this action. I just think it's still a little off-putting and maybe even a little embarrassing that it's just that low of a number.

ARONCZYK: So Patel has updated the petition and asked for a bigger cut.

Amanda Aronczyk, NPR News. Transcript provided by NPR, Copyright NPR.

Amanda Aronczyk (she/her) is a co-host and reporter for Planet Money, NPR's award-winning podcast that finds creative, entertaining ways to make sense of the big, complicated forces that move our economy. She joined the team in October 2019.