Car Loans of America

Uncertainty around colleges' financial futures may be at an all-time high. The one thing that's certain is that the weakest institutions are likely to struggle.

LOS ANGELES, CALIFORNIA, UNITED STATES OF AMERICA, April 21, 2020 /EINPresswire.com/ -- Colleges and universities will be paying a set of short-term costs, according to higher education leaders and financial experts interviewed both on the record and a condition of background. Those experts are divided over the significance of those costs, however. Some predict an uptick in closures or major cost-cutting, while others expect a difficult few months in which those who lend money to colleges are going to be more accommodating than usual.

Longer-term financial impacts are even less clear. With plunging markets and travel uncertainty around the globe, it’s possible students start staying closer to home at the exact moment college and universities have fewer endowment assets to cushion major financial shocks like changes in enrollment patterns.

In the immediate future, a slew of relatively small expenses will accumulate, college leaders say. Some colleges are planning to continue paying student employees who have been sent home as if they were still working to provide a form of financial support, show good faith and hopefully improve retention. Dormitories and other campus facilities need to be cleaned and sterilized -- especially in cases where some students or employees are remaining on campus.

It’s hard for institutions to reduce their cost of labor. Yes, staff members and some faculty members might be able to be laid off or furloughed. But that’s impossible in some cases without a declaration of financial exigency. And in a high-touch industry like higher education, it can also erode an institution’s ability to deliver quality education for its students -- especially with mass migration to remote learning underway.

Other potential costs that are hard to measure include fixes for hastily prepared online programs and stress on institutional loyalty if students and alumni feel they aren’t treated well during this time of crisis, according to Larry Ladd, senior consultant at the Association of Governing Boards of Universities and Colleges.

Dan Joelson
Car Loans of America
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