How Colleges and College Towns are Handling the Impact of COVID-19

How Colleges and College Towns are Handling the Impact of COVID-19

Colleges have reopened, with schools pursuing a variety of options for teaching students. Some schools have returned offering primarily in-person classes, others a hybrid of virtual and in-person classes, while others are offering just online classes. However, colleges and universities, like businesses, are being forced to operate under significant financial pressure unlike ever before due to the pandemic. And the implications for both students and universities could be dire. Read on to find out how the COVID-19 pandemic is impacting, and changing, colleges and universities in the United States.

How Colleges Are Adapting the Classroom to COVID-19

Arguably the most significant disturbance to colleges posed by the pandemic is how to adapt the traditional classroom to new social conditions. While colleges have already offered online courses for years, never have colleges dealt with the possibility of having to convert all of their classes to a virtual setting as they do now. The response by colleges and universities, however, has not been uniform. The Chronicle of Higher Education has been conducting an ongoing study of nearly 3,000 colleges. As of October 1, 2020, these nearly 3,000 colleges are offering classes in a variety of formats, as seen below:

Type of Classes Offered Percentage of Colleges Offering
Primarily Online 34%
Hybrid 21%
Primarily in person 23%
Fully in person 4%
Undetermined 3%
Other 5%
Fully online 10%

Offering classes primarily online is the most popular option pursued by colleges, with 34% of them doing this. Fully online, though, is a major smaller proportion, with only 10% of colleges in the study resorting to his option. A little under a quarter of colleges are offering classes primarily in person, with only 4% of colleges --- primarily small specialty, vocational and technical schools --- offering fully in-person classes. With just over a fifth of colleges, hybrid classes of both online and in-person instruction is the third most popular option for colleges and universities in the study.

Virtual Learning and Tuition Implications

Beginning in the spring and summer, with colleges shutting down and converting to online learning, several cases have been filed seeking refunds on tuition due to the changes in educational experience. Recently, a federal judge finally ruled on one of these cases, brought against Northeastern University by a group of students. In this class action lawsuit, the plaintiffs alleged that the university either breached its contract with them or engaged in unjust enrichment. The federal judge, however, dismissed the case while allowing the refunding of the school's recreation fee. More cases like this are likely to come before judges, but it remains to be seen if this ruling will serve as a precedent for future ones.

However, one area where refunds are happening is for room and board. It is very common for colleges and universities to make much of their money on room and board (excluding sports events and similar) and break even or lose out on most other operations, according to NPR. Therefore, prorated room and board refunds pose a significant financial stress to universities. The impact will vary in its effects depending on the college. According to the Washington Post, the University of Wisconsin system, which includes 13 campuses, estimates that it will issue about $78 million in refunds due to the pandemic.

The financial squeeze due to the pandemic has, unfortunately, already taken a toll on their staff. Many colleges and universities have already announced hiring freezes, pay cuts and furloughs, according to the New York Times. A related problem involves that of part-time and adjunct staff, people who often form the backbone of universities and make up more than 40% of faculty nationwide, according to the Washington Post. Nearly all of these staff types lack paid sick leave and few receive health benefits from their college.Another ominous sign is the cancellation of course offerings. For example, the president of Doane University, Jacque Carter, has proposed ending a number of programs because of financial pressures created by the COVID-19 pandemic, according to 10/11 Now. This includes ending many humanities, arts and foreign language major and minors.

The Financial Impact of Covid-19 on College Towns

The economies of college towns are inextricably linked to the operations of their schools. College towns depend on the sales transacted by undergraduate and graduate students, as well as teachers, administrators and supporting staff. Sports events bring in crowds near and far. Colleges operate research and other programs in conjunction with local businesses. All of this is now at stake due to the impact of the COVID-19 pandemic on higher education in the U.S.

The disruption of sporting events is already having serious effects on colleges. Looking at just college football alone, participating universities could face a loss of nearly $4 billion if that sport and its associated revenues are lost, according to ESPN. While the majority of college conferences have allowed the return of sports in one form or another, the traditional format of sporting events --- and the money it brings in --- has been dealt a serious blow for the foreseeable future. There are also indirect effects. For example, the COVID-19 pandemic has ruined the traditional experience that applicants expect from a college with a great sports team --- big, packed crowds in and outside the stadium; massive parties and tailgates; visitors and locals shuttling in and out for games. This could lead to fewer students applying to these kinds of universities, which would be a big change of pace for these schools.

Another major concern for college town economies is the town's employment. With hiring freezes, furloughs and cutbacks, many of those employed at the local college could and have seen their stable livelihoods upended. The role that a university plays in employing its hometown population is enormous and can be best observed in the city's Comprehensive Annual Financial Report (CAFR). These reports typically provide details on the principal employers of the city's residents. Below you'll find a table with data on the largest COVID-19 outbreaks at colleges --- per a New York Times ongoing tracker --- combined with employment data for the college or university's hometown.

College City State Employees As % of City Employment COVID-19 Cases
University of Georgia Athens Georgia 10,856 17.66% 3,888
Clemson University Clemson South Carolina 5,392 31.53% 3,770
Ohio State University Columbus Ohio 33,335 3.16% 3,051
University of Wisconsin-Madison Madison Wisconsin 22,365 5.46% 3,041
Indiana University Bloomington Bloomington Indiana N/A N/A 2,917
University of Alabama Tuscaloosa Alabama 11,403 24.03% 2,784
University of Alabama at Birmingham Birmingham Alabama 23,000 N/A 2,784
Pennsylvania State University State College Pennsylvania N/A N/A 2,682
University of Illinois Urbana-Champaign Champaign Illinois 13,934 32.00% 2,621
University of South Carolina Columbia South Carolina 6,395 5.22% 2,494
University of Arizona Tucson Arizona 11,251 2.47% 2,381
University of Iowa Iowa City Iowa 30,012 29.00% 2,109
University of Kentucky Lexington Kentucky 12,800 7.57% 2,070
University of Arkansas Fayetteville Arkansas 9,109 12.38% 2,034
Auburn University Auburn Alabama 8,446 36.80% 1,982
Arizona State University Tempe Arizona 7,150 23.59% 1,821
Miami University Oxford Oxford Ohio 3,215 69.00% 1,805
Brigham Young University Provo Utah 5,000-6,999 N/A 1,801
University of Colorado Boulder Boulder Colorado 6,463 3.41% 1,799
University of Missouri Columbia Missouri 8,310 8.76% 1,773
Texas Tech University Lubbock Texas 5,505 3.47% 1,768
Texas A&M University College Station Texas N/A N/A 1,661
Florida State University Tallahassee Florida 14,367 23.60% 1,656
University of Tennessee Knoxville Tennessee 6,689 1.53% 1,562
James Madison University Harrisonburg Virginia >999 >3.14% 1,527
Oklahoma State University Stillwater Oklahoma 5,037 21.00% 1,485
Illinois State University Normal Illinois 3,940 5.77% 1,384
University of Texas at Austin Austin Texas 27,426 2.50% 1,361
Iowa State University Ames Iowa 16,952 29.26% 1,340
University of Dayton Dayton Ohio 3,000 5.16% 1,299
East Carolina University Greenville North Carolina 5,672 7.41% 1,297
University of North Carolina at Chapel Hill Chapel Hill North Carolina 20,000 N/A 1,229
University of Central Florida Orlando Florida 9,476 0.72% 1,210
Missouri State University Springfield Missouri 2,874 1.24% 1,200
Georgia Southern University Statesboro Georgia 3,040 21.89% 1,178
Texas Christian University Fort Worth Texas N/A N/A 1,167
San Diego State San Diego California N/A N/A 1,148
North Carolina State Raleigh North Carolina 24,083 9.47% 1,134
Baylor University Waco Texas 2,986 2.44% 1,102
Louisiana State University Baton Rouge Louisiana 24,706 9.53% 1,082
University of Kansas Lawrence Kansas 9,994 22.29% 1,009
Purdue University West Lafayette Indiana N/A N/A 1,008
Ball State University Muncie Indiana N/A N/A 1,027

In a college town like Oxford, Ohio, home to Miami University (of Ohio), 69% of residents are employed by the university. But their livelihoods are threatened by the 1,805 cases of COVID-19 reported and its likely growth in numbers over the course of the fall. The University of Georgia has the highest reported number of cases according to the tracker, 3,888. Here, 10,856 residents of the town of Athens work at the university, which accounts for a sizeable 17.66% of employment. The University of Georgia has already hosted several football games with large crowds attending, employing social distancing measures in the stadium. Still, the university's large and rising number of cases calls into question how long this can be kept up.

The Bottom Line

The impact of the COVID-10 pandemic on higher education has been significant and punishing. As a fundamental institution, college is not going to vanish. But the effects of this crisis are unlike those ever faced by colleges and universities before. If we look at the savage Spanish flu of 1918, the pandemic certainly impacted universities, but higher education back then was not nearly as complex, developed and intertwined with the larger economy as today.

As colleges and universities look to tighten their budgets, you should get savvy with your finances as well. Scholarship programs are still being offered during these unusual times, which could save you money that you can put towards other, perhaps unexpected, expenses brought about by the pandemic. Though dorms might be closed at many colleges, the refund from these could be put to great use. All the while, as a college student, you always have access to a wide variety of student discounts and coupon codes to help spread money out during these times. Whether you're working in person in class or online, you can still access college student discounts.

Prospective students should keep an eye on how admissions might change at colleges they're interested in. The situation brought about by COVID-19 is very fluid and colleges are responding as best they can. Assumptions you may have made in the past about admissions at a certain college could be utterly wrong in our COVID-19 era. Keep your options more open than ever when it comes to schools, you're thinking about applying to. These are unprecedented times, but also times of potential opportunity for with the right thinking.

Andrew DePietro

Author: Andrew DePietro

Senior Researcher, and Content Strategist

Andrew DePietro is a finance writer covering topics such as entrepreneurship, investing, real estate and college for BrokeScholar, Forbes, CreditKarma, and more.