Connecticut’s public colleges and universities have walked on a fiscal knife’s edge for years.
Forced to frequently raise fees and tuition to offset dwindling state aid, higher education faces a new threat from the coronavirus — potentially worse than the initial surge that closed campuses last spring.
Simply put, what happens if students decide it’s cheaper — or healthier — to learn remotely, even after the pandemic?
Even a small shift in attitudes that saps 10% or 20% of fee receipts could push systems already in fiscal jeopardy into grave peril.
The pandemic “really exposes the Achilles Heel of how we budget for higher education,” said Rep. Greg Haddad, D-Mansfield, who co-chairs the legislature’s Higher Education and Employment Advancement Committee. “COVID has exacerbated a problem that already existed.”
“We’re in uncharted waters,” said Richard J. Balducci, former House speaker and chairman of the finance committee for the Board of Regents for Higher Education, which oversees the state university and community college systems. “We’ve never had a year like 2020. It’s something frightening, and most people get frightened when they don’t know what’s ahead of them.”
Former state budget director Ben Barnes, who’s now the chief financial officer for the merged public college system, warned in a December memo that students already had begun inquiring about breaking housing commitments for this spring.
“It remains unknown whether the pandemic will leave lasting changes to student preferences and behavior which will delay this recovery,” he wrote.
Pandemic takes a big bite out of university budgets
Everything changed at state colleges and universities shortly after the pandemic arrived last March, as campuses largely shut down and all classes went online.
Higher education units began to hemorrhage cash as they reimbursed students for millions of dollars in housing and meal plan fees.
Before the pandemic, the state universities typically filled 80% to 85% of dormitory capacity. Hoping for 76% this fall, they filled closer to 53%, Barnes said.
The entire state university-community college system, which is more than $60 million in debt so far this fiscal year, must collect at least $30 million in housing and meal fees this spring just to keep the damage from getting worse.
The Board of Regents recently projected budget deficits of about 6% in each of the next two fiscal years — provided they receive a 2% bump in state aid the first year, and nearly 5% more in the second.
The University of Connecticut faced a $76 million gap this fiscal year but shrank it to $8 million with hiring freezes, pay cuts, furlough days and cost-saving measures — and $20 million in federal coronavirus relief aid funneled its way via the state. They also have warned about the potential for big budget gaps in the coming biennium absent major new state assistance.
But with COVID-19 vaccines being distributed this month, many state officials assume the pandemic-related problems facing universities, though considerable, are temporary.
“I’m not that worried,” Gov. Ned Lamont told the CT Mirror last week.
The in-person experience, I think its value is being proven by its absence right now.”
Though the governor said distance learning almost certainly will expand coming out of the pandemic, “for a core group of students, that residential experience is going to be key.”
Dan Toscano, chairman of UConn’s Board of Trustees, said the residential experience remains highly valued by students.
“They’re desperate to get back together,” he said. “The in-person experience, I think its value is being proven by its absence right now.”
The state’s flagship university is also battling to preserve programs and avoid cuts, Toscano added, so that the on-campus experience remains attractive.
“Thankfully,” he said, “that’s not the path that we’re on.”
But Cynthia Stretch, an English professor at Southern Connecticut State University, said faculty already are “stretched to the breaking point” and fear what could happen if deficits to the Board of Regents’ system are closed with cuts.
“I think the faculty are just really … worried about what this is going to mean,” Stretch said. “Is the Board of Regents using the COVID crisis as an excuse for a massive restructuring?”
Higher ed has little fiscal margin for error
Some note it wouldn’t take a major shift in student attitudes to cause problems for an already-fragile funding system for higher education.
The Board of Regents is counting on housing revenues at the four regional universities to grow nearly 20% over the next two years. If things stay flat, a system already plagued by widening deficits must find another $10 million, according to Barnes’ office.
The reason why the margins are so tight not only pre-dates the coronavirus but extends back decades.
Things really changed in 1995 with the adoption of UConn 2000, a $1 billion, 10-year borrowing plan to rebuild the state’s flagship university and its aging, outdated campuses.
Within a few years, legislators also began to ramp up capital work at the state universities and community colleges, also with much fanfare.
But behind all of the hoopla was an unspoken understanding: The state would finance new dormitories, lecture halls, cafeterias and parking garages — and pay off all of the debt on these projects. In exchange, higher education would be expected to operate each year with less from Connecticut’s budget.
In the early 1990s, the state budget provided almost half of the University of Connecticut’s operating revenue, according to data from UConn’s financial office.
For the four regional state universities, it was more than 55%, and for the community colleges, almost two-thirds.
Now, for all three higher-ed units, it covers roughly 25%.
But the arrangement is not an even bargain.
The state’s share of higher education funding has eroded much faster than campus populations have swollen from all of the new dorms.
And over the last decade, as state government has been swamped by rapidly escalating pension costs, public colleges and universities have leaned more heavily on students and their families for funding.
Tuition, room and board, and mandatory fees for in-state students at UConn in 2020 were $30,484, about 52% higher than 10 years ago. At the state universities, it’s closer to 40% for Connecticut residents living on one of the four regional campuses.
The rush to enroll more students — and thereby collect more fees — has led to another problem around UConn’s main campus, which is located within Haddad’s home town of Mansfield. Local leaders have complained increasingly about a surge in absentee landlords and poorly maintained private housing offered to students at exorbitant prices, he said.
But while the housing market has gotten away from UConn, Haddad said he understands the university’s predicament, since state aid continues to shrink.
“COVID comes along and just puts all of this on steroids,” he added.
Are students’ attitudes about campus life changing?
And what happens, some officials are asking, if tuition and fee revenue simply won’t grow in the future as it did pre-coronavirus?
UConn may find out through the latest gem on its main campus.
A four-story, 191,000-square-foot Student Recreation Center opened in August 2019 — complete with an outdoor adventure center, eight-lane swimming pool, four-court gymnasium, a 56-foot-high climbing wall, racquetball courts and fitness performance suites — at a cost of $125 million.
To pay off the project, UConn was hoping, before the pandemic, to collect almost $11 million annually in fees.
Because of the pandemic, the $250 fee approved for students this fall semester was cut in half.
What happens, Haddad asked, if the rec center never achieves its targeted patronage of about 2,500 student participants each day? Would that discourage university officials from making more enhancements on campus? And would that, in turn, lead more students to learn online and save money?
I think the legislators are responsible and recognize the colleges and universities are the backbone of the state’s future.”
Harry Zehner, who spent most of his time at UConn living on the Storrs campus, moved into an apartment with friends in New Haven and became a commuter in his senior year.
“It’s cheaper,” he said, “I think if I was a freshman, it would be a lot different, where I’d be feeling terrible about not being on campus.”
Eastern Connecticut State University student Matthew Driscoll said that had he not needed his job on the Windham campus, he would have studied online this fall from his home in Waterford.
“The question was really … What will I be doing on campus that will be better for me?” he said.
But many students, even before the pandemic, preferred something other than a residential college experience, Haddad noted.
The Mansfield lawmaker was citing a new book by social scientist Nathan Grawe that warns of a slowing growth of traditional-age students graduating from high school.
In “Demographics and Demand for Higher Education,” published in 2018 by Johns Hopkins University Press, Grawe projected the number of college-aged students would fall 15% by the mid-2020s.
If states hope to eventually steer some of this group into higher education, it may be through distance learning or community colleges.
Even community colleges in Connecticut, which don’t feature residence halls, may not be immune from COVID-19 trends.
Barnes said the Board of Regents hoped to keep college enrollment flat this fall, but it dropped 15%.
And while Balducci acknowledged the pandemic could leave some older students wary of returning to in-person classes, community colleges traditionally see strong enrollment during tougher economic times, as displaced workers go back to school to broaden their skills.
Balducci also noted legislative leaders recently pledged to support $12 million extra for the community college system to ensure the debt-free college assistance program remains active at least through next fiscal year.
“I think the legislators are responsible and recognize the colleges and universities are the backbone of the state’s future,” he said.