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Higher Education in the Wake of COVID-19

Regional Matters
June 24, 2020


COVID-19 has impacted businesses and institutions throughout the Fifth District economy, and higher education is no exception. What began as a normal spring semester at colleges and universities became one of the most unusual on record, with instruction shifting from in person to online and students leaving campus to return home. As campuses closed, so did sports stadiums, concert halls, and research facilities that generate revenue. Most schools provided some level of refunds to students, typically for room and board, further reducing their revenues.

While the losses from the spring semester are now relatively quantifiable, much uncertainty remains regarding what awaits higher education this fall. Many colleges have yet to finalize their operating plans for the fall, and it is difficult to estimate how students, parents, and faculty will respond to these plans.  Since new measures are constantly being announced, this report serves as an analysis of the impact COVID-19 has had on higher education thus far and the impact anticipated for the fall semester, as of mid-June.

Impact on Higher Education During Spring 2020

In mid-March, nearly every school in the Fifth District closed their campuses. Instead of ending the semester early, most four-year universities and community colleges began delivering classes online. While this approach works reasonably well for lecture-style courses, institutions struggled to deliver online instruction for vocational education. Health science programs were often allowed to continue in person to maximize the United States’ ability to combat COVID-19, but other typically in-person courses were given weeks or days to transfer their instructional content online.

The outcome of vocational programs in the spring varied by state, school, and profession. In the Carolinas, most hands-on programs, like welding and nursing, were replaced by online instruction for one to two months, after which schools were able to hold in-person classes that followed social distancing guidelines. While these students were generally able to complete their studies on time, outreach to community colleges indicates that some students were forced to pause their studies until their schools are able to fully reopen again.

Four-year Colleges’ Plans for Fall 2020

There are 96 public, four-year colleges and universities in the Fifth District. An analysis of each school’s plan shows that those in the District of Columbia and Maryland are generally waiting until late June to decide how to conduct classes this fall. Most schools in the other states have announced a return to in-person instruction or a hybrid format for the upcoming semester. While some schools in other parts of the country, such as the entire California State University System, will perform fully online instruction this fall, as of mid-June, no Fifth District four-year institutions have chosen that path.

Many schools in the Fifth District are also adjusting their academic calendars for 2020-2021. While schools in the District of Columbia, Maryland, and Virginia are planning for an on-time start date or are undecided, a significant number of schools in North Carolina, South Carolina, and West Virginia plan to start the semester earlier than originally scheduled and end on-campus programming before Thanksgiving. The University of North Carolina at Charlotte is the only Fifth District four-year college that is planning a late start date for the semester thus far.

The University of North Carolina at Chapel Hill’s fall reopening plan is typical for a school in the Carolinas. They plan to open earlier than normal and finish before Thanksgiving. They also eliminated fall break to limit students’ travel away from campus and will convert large classes into smaller classes or online classes. The College of Charleston’s strategy is also relatively common. They plan to start in-person instruction on time (August 25), then transition to an online format for classes and final exams after Thanksgiving. Most Fifth District schools are retaining normal semester terms; only a few, like East Carolina University, will adopt a block schedule, where courses are taught in two eight-week blocks instead of 16 weeks.

Community Colleges’ Plans for Fall 2020

Community college plans for the fall vary across the district, and many schools report that they are still awaiting decisions from state authorities and system administrators. Though no Fifth District four-year public colleges have announced an online-only format this fall, some district community colleges have. One such school is Germanna Community College in Virginia. While nearly all courses at Germanna will be online in the fall, the school recognizes that some subjects require hands-on instruction. State regulations permitting, Germanna plans on offering clinical and vocational experiences in person, abiding by required health measures and social distancing practices. In some other Fifth District states, governors have already lifted the stay-at-home orders, allowing community colleges to partially restart in-person classes this summer.

Student Responses to Instructional and Campus Changes

Even if schools are able to open for in-person classes this fall, colleges and universities will likely look very different than normal. Classes will be smaller, with large, auditorium-style classes taught exclusively online. While most traditional college-aged students are at little risk of acquiring health complications from COVID-19, faculty that are older or have underlying conditions may need to teach in a virtual environment. Many schools in the Fifth District have announced that masks will be mandatory on campus, and congregational events such as summer orientation and convocations will be held virtually. Some schools have promised lower density in dorms and have designated a portion of their student housing stock for quarantined students. The verdict is still out on other events such as college football games and student social gatherings. Students who are able to return to campus this fall can likely expect a much quieter, more socially distanced experience than the one they originally signed up for.

Will students and parents be willing to pay their normal tuition, room, and board for a much different college experience? How much is the social, communal value of college worth? As of mid-June, the defining characteristic of students’ plans for this fall is uncertainty. According to a McKinsey & Co. report, new student full-time college enrollment numbers remain largely unchanged, given that most students applied to college before COVID-19 arrived in the United States. If schools are able to hold in-person classes, new student first-time enrollment may be in line with pre-COVID-19 expectations. However, 48 percent of students say they would defer their enrollment or look for another school if the institution they chose went online this fall. According to The Chronicle of Higher Education, nationally, 66 percent of four-year colleges and universities plan on returning to campus in the fall. Only 8 percent are planning to operate completely online, while the rest are undecided (17 percent) or planning hybrid models (10 percent). For institutions that decide to do remote learning, “summer melt” (students who say they will enroll, then don’t) will likely be larger this year than ever before. Prospective students strongly favor in-person experiences, mainly because they doubt their ability to learn and form friendships in an online environment.

Despite optimism that students will return if classes are held in person, Free Application for Federal Student Aid (FAFSA) filings from returning students declined substantially in March and April, with 250,000 fewer filings compared to last year. As of May 31, the FAFSA filings of students whose families had incomes over $50,000 declined only 1 percent, while students whose families make less than $25,000, FAFSA filings have declined by more than 8 percent. This indicates that lower-income students, who are most likely to quality for financial aid, are less likely to enroll this fall than they were last year. One cause of this could be that low-income workers are much more likely to be unemployed or furloughed because of COVID-19, and now their children are facing additional financial stress related to attending college. Students that may have usually gone to college may have to work to help support their families or may lack the funds to support themselves in college beyond what they are able to obtain via federal and institutional financial aid.

A recently released survey from the Strada Center for Consumer Insights indicates that approximately one-third of American adults (ages 18 to 64) had canceled or changed their education plans as of late May. This number is considerably higher for younger adults, with results indicating that 65 percent of survey participants aged 18 to 24 have changed their education plans, with 22 percent saying they have canceled their plans altogether. These impacts also vary considerably by race. While only 26 percent of White respondents aged 18 to 64 indicated they had canceled or changed their education plans, that number was 42 percent and 50 percent for Black and Hispanic respondents, respectively. Interestingly, Black and Hispanic Americans are also more likely than White Americans to indicate an interest in enrolling in education programs in the coming months, across all types of institutions.

Since the beginning of the pandemic, students have begun to make “safer” choices on what school they want to attend. In the wake of COVID-19, the percentage of students whose first choice school is an in-state public school increased dramatically, from 30 percent to 40 percent. The increase came nearly equally at the expense of out-of-state public and out-of-state private schools. Student sentiment is shifting towards affordability and accessibility in the COVID-19 period of social distancing and job instability. While public schools can probably make up the loss of out-of-state revenue by recruiting more students from their own state, private schools will likely suffer significantly. Some private schools, like Furman University in South Carolina, are already 15 percent or more short of their goal for committed students for the fall. A decline in enrollment is especially concerning for private universities, which receive 82 percent of their funding from tuition and student fees; rated public universities get only 38 percent of their funding from these sources. Notably, a minority of private schools, like Kenyon College in Ohio, have reported that they exceeded their goal by more than 5 percent. There are no clear differences between the private schools that underperform and those that exceed their goals.

Community colleges also have the potential to benefit from students deciding to alter their expected college plans. Outreach to Fifth District community colleges indicates a great deal of uncertainty regarding their fall enrollment as they expect an increase in enrollment from people ages 18 to 24, but also anticipate that many of their non-traditional students, aged 25 and older, may not be able to attend due to financial limitations related to the economic crisis. Many students appear to be waiting to learn their colleges’ final fall plans before making final decisions.

Interestingly, increased summer enrollments have been reported at many Fifth District schools.  Germanna Community College has summer enrollment at levels 30 percent above summer 2019, while Virginia Tech is up 28 percent. The University of Maryland Global Campus is up 11 percent this summer, which its president attributes to the relative prices of their courses. Outreach to Fifth District colleges suggests increased summer enrollment could be due to an increase in dual enrollment, a decrease in the cost of summer school at certain institutions, and students taking classes because they cannot find work for the summer. However, college and university leaders remain hesitant to assume that an increase in summer enrollment will translate to a similar increase this fall.

Financial Implications

Just how significant were the revenue losses this spring? College and university presidents from across the country came together asking for $50 billion in aid from the federal government. In return, they received $14 billion from the coronavirus relief bill — $6 billion of which was allocated for direct aid to students. Because of the losses and the uncertainty regarding the 2020-2021 school year, Moody’s downgraded its outlook for the higher education sector from stable to negative, noting that 30 percent of institutions had operating deficits as of mid-March.

To respond to financial losses and continued uncertainty, colleges have announced faculty and staff furloughs, reductions in their workforces, and cancellations of academic programs. A few have decided to close permanently. In the Fifth District, schools taking action range from small liberal arts schools such as Guilford College in North Carolina, which furloughed more than half of its non-faculty staff for two months, to large research universities such as West Virginia University, which furloughed 900 employees and cut the salaries of athletic staff. There have also been permanent athletic eliminations, such as men’s lacrosse and baseball at Furman University in South Carolina and men’s soccer, men’s tennis, and men’s indoor track and field at Appalachian State University in North Carolina. In each case, schools indicated that these decisions were made specifically due to COVID-19. These cost-cutting decisions demonstrate schools’ cautious outlook for the coming academic year.


As of mid-June, there are many unknowns regarding the impact COVID-19 will have on higher education.  The impacts associated with the 2019-2020 academic year are mostly known and significant, but the coming impact on the 2020-2021 academic year looms large. It bears noting that the nature of the pandemic itself is uncertain. In several Fifth District states, most notably the Carolinas, COVID-19 rates are rising rapidly and the future health, economic, and political effects of the virus are unknown.  It is difficult to ascertain if schools would change their plans for the fall if infection rates continue to increase.

Some enrollment declines could be temporary as students may choose to sit out of school for only a semester or two before returning next spring or fall when colleges and universities have returned to something that more closely resembles “normal.” Schools will undoubtedly be working hard to offer admissions deferrals to these students — or promises of continued enrollments for current students — who decide to take some time off.

While private college and university revenue streams remain the most at risk in the face of falling enrollments, state schools are also bracing for the potential for substantial losses. All of this uncertainty is occurring at a time when state and local budgets will be facing shortfalls due to the decline in tax revenues. This means that state schools will likely be facing additional reductions in funding from government sources at the same time enrollment is falling, or is at least at risk of falling.  Schools, state and local governments, students, and their families will need to remain agile during this time to adjust to market and health conditions. Schools that find innovative ways to meet the changing demand for higher education in the wake of COVID-19 will likely fare better than those who expect a rapid return to normal.

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Views expressed are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.