Higher education institutions across the world have started to experience the financial impact of COVID-19. A majority of them envisage declines in both domestic and international student enrolments. This in turn will lead to tuition shortfalls and could result in immediate budget impacts and forecasts for the coming year. This is underscored in a report by Moody’s Investors Services.
Moody’s expects that due to COVID-19, almost all rated universities will enrol fewer students for 2020 in USA, Canada, UK, Australia, Singapore. Also, if classes go online for the first semester or first few months of the academic year, then campuses will remain closed, affecting income from residence halls, catering, conferences and sporting events. Additionally, endowments and gift incomes are likely to wane. International student influx will depend on the how the outbreak and policy response evolve in the countries where the institutions are located and also in the countries where the students come from. Easing of travel restrictions and other public health measures will determine this. The damage could be more intense for those colleges that depend largely on student enrolments from China. All forecasts agree that time is running short to firm up enrolment for the fall semester, and especially for incoming international students that require additional time for qualifying tests, visa processing, and travel and settlement planning.
United States of America
Public institutions in jurisdictions where government funding has been cut will be especially vulnerable. The extent of the impact will mostly depend on the duration of the outbreak. The sooner that campuses open, the lesser will be the financial damage. A US$2 trillion emergency relief package was passed in March 2020 that includes US$14 billion targeted to higher education. The American Council on Education (ACE) deems this to be an inadequate amount and is calling on Congress to earmark another US$47 billion in emergency aid that “would be equally divided between students and institutions” and that could “at least partially mitigate the damage done by this pandemic.” On 9 April, ACE projected an overall drop in college enrolment of 15% for fall 2020 – including a 25% decline in international student numbers – and an expected revenue loss for institutions of US$23 billion.
United Kingdom
On 10 April, Universities UK (UUK) – the representative organisation for the UK’s universities, proposed a sweeping package of relief measures for British universities. It estimates the financial impact of the pandemic has already reached £790 million for the country’s institutions, including revenues lost in the form of accommodation, catering and conference income. Costs have gone up to support students learning online. Universities are projecting a significant fall in international students and a potential rise in undergraduate home student deferrals. The UUK proposal calls for billions of pounds in relief funding and a variety of policy measures aimed at easing the pandemic’s impacts. This includes a proposal for “additional flexibilities in the visa system to support international students planning to start courses this autumn including allowing those students already here to switch visa category in country (extending current arrangements beyond 31st May) and flexibility on English language and other requirements for visa applications, where these cannot be provided due to the closure of testing centres or disruption to examinations.”
Australia
In April, the Australian government announced an emergency package for its universities that includes funding for new short retraining courses designed to help with re-skilling unemployed Australians, a funding guarantee of AUS$18 billion for domestic enrolments (regardless of actual student numbers), and another AUS$100 million in regulatory fee relief and deferrals. Apex body – Universities Australia, has warned that the package will not be enough to cover a projected revenue loss of between AUS$3 billion and AUS$4.6 billion that the sector is facing this year.
Canada
The government and university officials are trying to forecast the impact of COVID-19 on international enrolments for the coming academic year. Combined tuition spending for foreign students at Canadian universities was roughly CDN$6 billion in 2019. With almost 50% planning to defer their admission for a year or change their study abroad plans – the institutions will face a significant budget issue. The Canadian government has taken a step in allowing more flexibility for students that were planning to come to Canada this spring to begin their programmes online, but there has not yet been a determination as to how this approach might apply for fall commencements.