by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Shannon Watkins of the Martin Center focuses attention on financial challenges common to N.C. colleges.
Amid COVID-19, nearly every college—whether a community college or a four-year institution—is facing an unusually tight budget this year. As the economy takes a hard hit, key sources of higher education funding, such as donor grants and government aid, are likely to be affected.
But for many institutions, the most crucial sources of funding are student enrollment and retention—which might be most affected by COVID-19. According to a survey conducted by the American Council on Education in April, 86 percent of college presidents put “fall or summer enrollment numbers” as the most pressing issue their campuses face during the pandemic.
As a result, experts and researchers predict possible waves of colleges shuttering their doors.
“Think of the revenue shocks these universities are suffering…I don’t want to sound too alarmist, but this could possibly be devastating,” said Gregory Price, an economics and finance professor at the University of New Orleans. “A lot of underendowed, financially fragile institutions are going to have to shut their doors, unfortunately,” he added. “COVID-19 will kill off some schools,” predicted Ohio University economics professor Richard Vedder.
In North Carolina, some colleges and universities are more likely than others to weather the financial storm. Most of North Carolina’s institutions of higher education were included in a recent “financial fitness” database compiled by the Hechinger Report. In its Financial Fitness Tracker, the Hechinger Report analyzed the financial health of 2,662 colleges and universities nationwide—using methodology outlined in the book The College Stress Test. …
… Of the state’s 36 private non-profit colleges and universities, 20 of them received at least one rating of 2 or 3 for at least one category. By far, private schools in North Carolina are struggling the most with retention—keeping students enrolled from year to year. Of the 20 private schools, 16 of them received at least a 2 rating for retention.