Analysis finds CARES Act funding fell well short for many public colleges

Analysis finds CARES Act funding fell well short for many public colleges

A new analysis finds that the majority of the country’s largest public college systems received significantly less coronavirus aid from the government than they needed, leading to massive budget shortfalls.

The review, done by nonprofit government watchdog Accountable.US, highlights the notable financial problems that colleges and universities are facing as fall classes begin amid the pandemic.

Included in the $2.2 trillion CARES Act passed by Congress in March was $14 billion allocated to the Higher Education Emergency Relief Fund, or HEERF, to be dispersed to individual institutions.

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Accountable.US looked at the largest public university systems for undergraduate students in each state and said they received a total of around $1.75 billion from HEERF, roughly 2 1/2 times less than was actually needed to fill the revenue gaps institutions are facing because of COVID-19.

The nonprofit watchdog told The Hill that it “identified either projected revenue loss, revenue loss from the spring 2020 semester, or other COVID-related financial loss for each school and separated the losses into the following datasets: [fiscal] 2020 losses, Spring 2020 losses, [fiscal] 2021 losses.”

Fourteen of the university systems have projected revenue losses or budget shortfalls for fiscal 2020, and 18 expect them for fiscal 2021. A dozen of the institutions reviewed project a deficit from the 2020 spring semester, when the pandemic began.

Of the 44 states that had relevant financial data available, only eight states — Idaho, South Carolina, Arizona, Florida, Texas, North Dakota, Oklahoma and California — received sufficient HEERF funding.

In reopening, many institutions have indicated that they lack sufficient funds to properly retrofit their campuses to allow students to safely return. 

While some have opted for hybrid models that feature a mixture of in-person and online classes, others have made the decision to go completely online at least for the fall semester.

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Despite many colleges having to operate mostly or completely virtually, tuition around the country has continued to increase. Texas A&M University and the University of Washington — both included in the report — raised tuition for the 2020-21 academic year by 2.6 and 2.4 percent, respectively, according to Market Watch.

Other university systems reviewed in the report, including the University of Colorado, Pennsylvania State and Michigan State, froze tuition.

A Labor Department report published last Friday stated that the consumer price index for college tuition and fees dropped 0.7 percent from July to August, the steepest decline since 1978. The year-to-year increase of the index was 1.3 percent, the smallest bump ever recorded.

The financial burden of the pandemic, however, has hit students too: In April, the American Council on Education estimated that the level of unmet needed financial aid would increase 20 percent from the already record amount of $60 billion.

Moreover, research in recent years has shown that funding cuts to public colleges have increased the financial burden on students and “worsened racial and class inequality” among student populations.

“What’s often happened in the past, is [states] have turned to cuts in higher education knowing that they can increase tuition. If that happens again, it makes it more likely that low-income students and students of color will not be able to afford it,” Michael Leachman, vice president for state fiscal policy at the Center on Budget and Policy Priorities, told The Hill.

An October 2019 study that Leachman was a part of noted that, as of 2018, overall funding for public colleges was $6.6 billion less than it was in 2008, right before the Great Recession. But tuition costs at these institutions have risen 37 percent in the same time.

The Education Department did not immediately respond to The Hill's request for comment, though a Sept. 9 update to its website signals that the period for colleges to apply for HEERF aid has been extended until the end of month.