NJ colleges make big cuts to take on COVID-19, more expected
Classes continued virtually and degrees were still earned, but colleges and universities in the Garden State have had to make massive cuts in order to provide some type of financial relief for themselves during the COVID-19 crisis — even with many institutions collecting millions of dollars in monetary assistance from the federal government.
At the same time, institution leaders can't yet anticipate how much money they may end up losing come September if the health emergency doesn't subside substantially, and students — the ones willing to enroll — are still being told to stay off campus.
"Our short-term costs this semester alone are $11 million, and this does not take into account what we may experience in the fall," said Rider University President Gregory Dell'Omo during a virtual hearing examining the pandemic's impact on higher education in New Jersey.
Rider received $3.6 million in COVID-19 funding from the federal CARES Act, he said.
"It was helpful, but not enough," Dell'Omo said.
To help make up for reduced housing and meal plans, along with other moves such as a tuition freeze for undergraduates and the suspension of distance learning fees for summer courses, the private university in Lawrence made "some very, very tough decisions," he said, including worker furloughs, reduced work and pay structures for other employees, and the elimination of all non-union salary increases.
Together, the seven institutions represented by the New Jersey Association of State Colleges and Universities have lost more than $125 million related to the COVID-19 crisis, according to Eugene Lepore, NJASCU executive director. That number is exponentially higher, he said, when research institutions such as Rutgers and Montclair State are included.
On top of refunds and credits, Lepore said, institutions have lost millions in fees, parking revenue and event revenue.
"Recently, declines in the stock market have reduced endowments, and we're beginning to see a decline in philanthropic gifts," Lepore told lawmakers. "If campus housing cannot reopen in the fall, many institutions will lose additional millions that they rely on to pay debt service and operating costs."
The continued uncertainty over COVID-19 is affecting the decisions of students and parents in terms of college enrollment, he added. Many schools, he said, anticipate year-over-year enrollment reductions in excess of 10%.
Lepore said in order for students and staff to return to campus safely, colleges and universities "will require significant support from the state" in order to ensure an adequate supply of coronavirus testing materials and personal protective equipment, along with the capacity to perform "thorough contact tracing."
In March, the state announced it would be placing half of the remaining Fiscal Year 2020 higher-ed operating aid in reserve as part of more than $920 million in frozen spending to protect the state's fiscal stability during the pandemic.
Susan Cole, president of Montclair State University, said the public institution has been struggling to regain the state appropriation levels seen in 2006 before the Great Recession. With state funding reduced even further due to the coronavirus, she said, MSU currently has an operating appropriation of $34.8 million.
"The last time we had a state appropriation that low was 1991, when it was a state college, not a public research university," Cole said. "Cutting our resources — this is not the time."
"It was extremely necessary to hold a hearing with our colleges and universities in order to gain a better understanding of their concerns for the months ahead," said state Sen. Sandra Cunningham, D-Hudson, chairwoman of the Assembly Higher Education Committee. "They have done an incredible job in the last few months, transitioning to virtual instruction and prioritizing the health and wellbeing of all their students. We have a tough road ahead but I will continue working diligently in the legislature to address their concerns."
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