Coronavirus, Cash and Countdown

Let’s start by stating the obvious. The current epidemic is hurting all American colleges and universities but, like the disease itself, it will be fatal only to some. And, just as we can identify the population at greatest risk from COVID-19, we have known for years what kinds of colleges are at greatest risk of closing: enrollment under 1,000; little or no endowment; tuition dependent; located outside major urban areas.

According to Forbes’s college financial health rankings of 933 private, nonprofit institutions, 177 received the lowest grade of D, meaning one step from financial disaster. They would be among the 531 colleges that did not make their enrollment goals last year.

There is no doubt that, come September, there will be a demoralizing list of colleges that are not reopening: at least dozens, possibly 100. And if history is a guide, there will be laments from faculty members: “We didn’t know … They wouldn’t give us the numbers!” Or as one professor at the recently closed MacMurray College protested, “They told me … that the school had financial problems, but I had no idea …”

And when the closing comes suddenly, there will be explanations from the administration and the Board of Trustees that “we were trying to save the college right up until the last minute, but it just didn’t work.” Instead of being able to plan, even plan for the worst, all staff must then turn on a dime, scramble and pursue the least-bad option for any professional future they can find.

In many ways, the most vulnerable victims are the young people who had put their trust in the institution. Even if the college has arranged to teach-out the semester, and for its students to transfer to other institutions, it is no wonder that all are saddened, most are bewildered, many are confused about their futures and some doubt they can continue in higher education.

It does not have to be like this. No matter how weak, if an institution is being run properly, there is no reason any closing should come as a surprise. In higher education there are signposts lining the road to the future. For small colleges in financial peril, these are data points that must be gathered, entered and analyzed on a relational database, updated and studied each day during the enrollment period.

Some indicators are obvious: total applications, yield, deposits received.

Others should be combined into the mix as they can help confirm or refute the traditional numbers: tuition installment payments, housing deposits, health forms, insurance confirmations, even parking requests must be compared and contrasted by applicant’s name and Social Security number to help determine realistic numbers of incoming students.

One challenge is that these data are not all housed in the same department on campus. Another is that they come to the college over a period of months. And at most colleges, no single office is responsible for gathering the data and maintaining a database. But together these figures will paint the clearest picture available of what the likely student population will be on move-in weekend in August.

All through the spring and summer months, these numbers, updated at 5 p.m. the night before, should be on the president’s desk at 9 a.m. each morning. Ditto the chief financial officer and the admissions director. Statistics from each of the previous two years, on the same dates, should be available for comparison. These three college officers should meet each day to analyze the latest figures and plan any extraordinary outreach or policy innovations, as necessary.

Let’s follow the timeline over the next five months and look at the indicators that can help give us a good idea if a college will have the critical mass of students needed to reopen, or not. First, we look back at last month.

March

• Measure application numbers and acceptance rate against last year’s (admissions office).

It is important to recognize that the application and acceptance processes took place in a before-coronavirus (BC) environment. Before the stock market dropped by 25 percent and before 10 million workers lost their jobs in the last two weeks of March. These macroeconomic indicators will exert a strong downward pull on enrollments at all but the very top-ranked colleges and universities.

So far, only highly competitive colleges have released application and acceptance numbers, and they are not very different from last year’s. Figures are not published for many small, struggling colleges, partly because some accept applications up until the beginning of the academic year. Nevertheless the numbers are known on campus, and should be studied.

April

• Preliminary data on yield (admissions office) and numbers of requests for additional financial aid (financial aid office). This is part of the bargaining process that all colleges face and is a major factor in enrollments at financially weaker colleges.

May

• May 1 is the traditional deadline for student commitment to a college and to make a deposit (finance office). This will be an indicator of yield at many colleges, but at least 300 are pushing the commitment date back to June 1.
• How many fee waiver requests have been received (finance office)? These may indicate uncertainty about commitment more than financial need.
• What is the direct competition (similar, struggling colleges in the same geographic area) doing? Can these initiatives be quantified? What do they cost?

June

• First installment payment for tuition, room and board, and fees is due at some colleges (finance office). This spreads payment over 10 months and represents the first true test of commitment to attend. Conditions would have to be dire for a family to pay one-tenth of a year’s college costs but reconsider later.
• Myriad health histories, doctors’ reports and vaccination forms are due (campus health center). Are they arriving as scheduled?

July

• Housing request forms, housing lottery and housing deposits are due (housing office). Data points indicative of intention to attend.
• First installment payment for tuition, room and board, and fees is due at remaining colleges (finance office).
• Incoming students sign up for on-campus orientation (student life office).

August

• Second/third installment payment for tuition, room and board, and fees is due (finance office).
• Full tuition, room and board, and fees are due from families paying semester by semester (finance office).
• Preliminary selection of courses is submitted (registrar’s office).
• Requests for leaves of absence arrive from returning students (registrar’s office).
• Requests for delays in matriculation arrive (admissions office, registrar’s office).
• Work-study job requests arrive (finance office and career center).

There is no doubt that this approach involves many moving parts, and that all the data in the world cannot save a college in a financial death spiral. But early assessment of the viability of continuing operation benefits all stakeholders -- students, families, faculty, staff, community -- and may help avoid a “we just didn’t know …” moment.