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Education Dive
What's Next: As colleges make cuts, new ways to make (and save) money emerge
The coronavirus pandemic is costing the sector in almost every part of
its operations, but certain measures could benefit schools down the
road.
Jeremy Bauer-Wolf
April 29, 2020
As the costs associated with the coronavirus pile up for colleges, it
seems almost moot to point out that in certain areas, institutions are
netting immediate savings.
After all, some colleges and systems forecast losses in the tens of
millions of dollars. So halting aspects of campus operations — as well
as large-scale events such as commencements and recruitment fairs — can
save some cash. But their losses are big enough that a little savings
here and there won't rescue their budgets.
Consider this example:
Most institutions have shuttered almost all their academic buildings
and residence halls. At one large college, that move saved about $1
million in utilities expenses, Jim Hundrieser, vice president for
consulting services at the National Association of College and
University Business Officers (NACUBO), told Education Dive.
However, that money was immediately directed to new coronavirus-related
costs, Hundrieser said. Officials needed to drop half a million dollars
on devices to equip certain administrative employees to work from home.
The other half of the money was spent on shutting down campus
laboratories, he said.
Over time, though, colleges may find that changes made because of the
virus are netting them some savings, such as by reducing their physical
footprint as more employees work remotely, said Kaitlyn Maloney, senior
director of research at consulting firm EAB.
Suburban and urban colleges have historically not allowed certain
employees, such as those who work in facilities management or IT, to be
remote because they are so "student- and faculty-facing," Maloney said.
Rural schools have sometimes allowed their IT professionals to work
away from campus because those positions are harder to recruit for
nearby, she said.
Colleges are figuring out that some of these services can be done
outside of the campus, which provides them and their employees new
flexibility.
Should telework continue past the pandemic, and colleges find they need
less space, they could consider leasing out the first floor of a
building to a fast food operation or a university-owned hotel to a
third-party operator, Maloney said. These arrangements usually provide
colleges quick cash immediately, a steady source of income over time,
and let them retain ownership of the buildings, she said.
For now, however, the significant expenses from colleges' responses to
the coronavirus outweigh any money they'd otherwise be making or
saving. "The costs are just massive," Hundrieser said. "You might save
some dollars here or there but it's never going to be enough."
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