Colleges will receive millions in stimulus money, but coronavirus expenses are greater

The federal government has begun doling out $14 billion in stimulus money to the nation’s colleges and universities, including hundreds of millions to schools with campuses in the Philadelphia region.

Nearly half must be given directly to students, though most area schools said they are still trying to figure out how they will do that.

One thing’s for sure: The other half won’t be enough to stem the losses colleges are anticipating from the coronavirus.

Pennsylvania State University is slated to receive the largest amount of federal stimulus dollars — nearly $55 million, about $27 million of which can be applied toward losses, such as the tens of millions it refunded to students in room and board after forcing them to leave campus mid-semester.

But the college is anticipating $138 million in losses through the end of the semester, said spokesperson Lawrence Lokman, and an additional $6.5 million in expenses. The university did not provide a breakdown, but losses include diminished revenue for its hotels and conference centers and airport, and sports-related activities.

At Rutgers University, which is receiving about $54 million, losses are expected to approach $200 million over three months, said spokesperson Dory Devlin. That includes about $50 million in student refunds, about $73 million less in state funding, and clinical losses of nearly $60 million, Devlin said.

The 14 Pennsylvania state universities, including West Chester and Cheyney, are expected to receive nearly $80 million, about half of which can be used to offset losses currently projected at $100 million.

“If there is a common element, it’s that every college in the country is facing an immediate cash-flow crisis,” Terry W. Hartle, a senior vice president at the American Council on Education, said late last month.

» READ MORE: Colleges stand to lose millions because of the coronavirus

The council is among about 40 higher education groups that have asked the federal government for $46.6 billion for colleges in the next round of funding, about half of which would provide financial aid to students to keep them in school. The request anticipates a 15% decline in fall enrollment, plus a 20% increase in students who need more financial aid as a result of job loss or other virus impact. Philanthropic donations also are likely to be down, as well as other revenue, including summer camps and programs that colleges may not be able to hold.

“We feel very comfortable it’s a defensible ask,” said Dan Madzelan, the council’s associate vice president for government relations.

Colleges were awarded money based on students enrolled from lower- and middle-income families as measured by federal Pell grant eligibility, as well as full-time enrollment.

The government has begun releasing the half that goes to students. Colleges are trying to figure out how to distribute it. “There’s very little guidance from the federal government on what’s allowed and what isn’t,” said Julie E. Wollman, president of Widener University in Chester. “Clearly, it has to benefit students.”

Students can use it for tuition, books, food, child care or other needs to support their education, she said.

“It’s very much like the stimulus checks that people receive,” she said.

Penn State has created a task force to determine how the money will be distributed.

“Our goal is to get this money into the hands of our students as quickly as possible," president Eric Barron said.

» READ MORE: Charging full tuition for online classes? No, say some students, despite the coronavirus.

Schools have choices on distribution, said Sara Goldrick-Rab, a Temple University education policy professor, whose center has offered guidance. They could distribute it all immediately, or give money to students as needs arise, she said. Money can go to any student in need — not just those who have received Pell grants, she said, noting that students whose families were financially fine before the virus could be reeling from unemployment by the fall.

“Congress did a decent job here with giving colleges a lot of leeway on that,” she said.

Colleges are also anxiously awaiting the second half of the money as losses mount.

Rowan University in New Jersey, which is receiving about $14 million in stimulus money, anticipates a $33 million shortfall in its budget from student housing and meal refunds, lost patient revenue and lower state funding.

» FAQ: Your coronavirus questions, answered.

“With so much uncertainty ahead, I have asked that nearly everything for the immediate future be put on hold that is unrelated to our core mission,” president Ali A. Houshmand told the campus last week. “Plans for major renovations, facility expansion projects, new academic buildings and residence halls are temporarily shelved. Every budget expense is being scrutinized. And, except for a few instances, we have implemented a hiring freeze across the university.”

Temple University will receive $28.7 million in stimulus, half of which will go to students.

“The remainder will come nowhere near to making up for the losses we have suffered so far, much less make up for what we might experience in the future,” Ken Kaiser, Temple’s chief financial officer, said in a campus message.

Temple last week announced a 10% pay cut for officers, deans, and advisers to the president, and a 5% cut for nonunion employees earning more than $100,000.

St. Joseph’s University, which will receive about $2.8 million in stimulus, projects a $12 million to $15 million loss through May 31, said president Mark Reed. About $9.1 million is due to room and board reimbursements. The university has instituted a temporary hiring freeze and spending restrictions.

“There are projects that we will simply push off and not do for a period of time,” Reed said.

But the school anticipates finishing the year with positive cash flow, thanks to earlier savings, including a voluntary separation program for long-serving faculty and staff and refinancing of debt, he said.

Widener has frozen hiring, eliminated most travel, and is planning pay reductions for top administrators, Wollman said.

“We are predicting there are going to be some very significant revenue shortfalls,” she said.

The college, which will receive about $2.8 million in stimulus dollars, has refunded $4.5 million in room and board and faces $500,000 in expenses or losses, she said.

But the real problem could come in the fall, when enrollment is projected to be down, she said. In addition, the university likely will have to increase aid to students while weathering a drop in donations and lower returns on the endowment, a portion of which many schools use to support operations.

Ursinus College officials also worry about the fall. The Collegeville campus faces a $6 million loss this semester, which is equivalent to about 10% of its operating budget.

“One way or another, we will get through this fiscal year," said Mark Schneider, vice president for academic affairs and dean. "The question of what happens next year, this, frankly, is the thing that has me kind of staying awake at night.”