College’s latest financial challenges demanded budget cuts and layoffs nationwide. The COVID-19 pandemic and economic stoppages have marked down tuition revenues, reduced state government funding for higher education, and in some instances, slashed athletic ticket sales. Aside from cutting expenses to stay financially afloat, colleges are increasing student fees.
The same applies to Western Carolina University, where students may encounter a bigger bill in the Fall 2022 semester.
The Board of Trustees recently approved increases in athletic fees and meal plan rates for the student body. Additionally, Policy 96 – a controversial living policy that requires students to live on campus during their first two years of college – was declared a money ploy by many.
As shown by a survey piloted by the Tuition and Fee Committee – where 69% of its respondents disapproved of the marked-up fees, students are concerned in light of WCU’s policymaking. But on the face of it, raising rates might be required, during and after a crisis, in keeping a financially healthy institution.
Higher education, as a whole, lost $183 billion because of the pandemic, according to research conducted by Professor of Strategy Pual N. Fraga and his colleagues at the University of North Carolina at Chapel Hill. The research estimated the impact as $85 billion in lost revenues, $74 billion in starved state funds, and $24 billion in COVID-related expenses. In the short term, WCU stayed consistent with this pandemic-induced bust as its revenue sources stopped short.
While each college has a unique financial mix, WCU receives revenue from five major sources: tuition, the state government, “auxiliary” activities (rent on dorms, sports sponsorships, events, etc.), federal agencies, and third-party donors. The pandemic nearly dried out these financial wellsprings:
- Campus closures stamped out auxiliary income
- Surging unemployment at the pandemic’s peak reduced families’ ability to afford tuition and fees, reducing enrollment
- The economic stoppage wiped out state tax collections
- The strife in the stock market made some donors run scared
In March 2020, as students took to Zoom lectures, campus closures canceled out auxiliary income. This loss taxed WCU in the short term, though the CARES ACT quickly settled the account. Passed by Congress on March 27th, 2020, the CARES ACT, a higher education emergency relief fund, gave $2.2 trillion to provide economic aid to Americans badly affected by the pandemic. Of that money, about $14 billion was allocated to the Office of Postsecondary Education as the Higher Education Emergency Relief Fund, or HEERF. The relief fund filled WCU’s bill with a share of $51 million, allowing the university to reimburse itself for the lost revenues. Though most economic-relief programs have already wound down, HEERF braced WCU for a strong financial turnaround.
Like most colleges or universities, WCU stuck out the pandemic fine though somewhat depleted. The crisis stamped auxiliary funds, but they will get back to normal levels; Policy 96 will surely help; so will the increased athletic fees. Less money rolled in from donors in large quantities, but a record number of donors shelled out cash in smaller amounts. The emergency relief fund helped too. With how things stand, however, certain conditions need to be kept in sight.
Inflation is the most threatening of these conditions. Inflation, now at record-highs, racked higher education at the worst possible time, as enrollment declined by nearly a million students in the wake of the pandemics’ heyday. Still, there is a higher cost of everything from energy to food, plus a high strain on wages and benefits. Citing this, colleges all over the country hiked up tuition and fees, some as much as 4.7% – while also raising prices for meal plans and housing – which, at public four-year universities, are already higher than in-state tuition.
In response to these inflationary binds, WCU raised its meal plan rates, on average, by 1.19%. The way to game on inflation – put an order out for an unfortunate necessity: upped costs.
For the university’s financial future, inflation is particularly problematic. Inflation is regarded as costly because it distorts price signals, so prices on anything that builds a university infrastructure are increasingly difficult to agree upon and pay.
WCU’s Vice Chancellor for Administration and Finance, Michael T. Byers, said the impact of inflation has him the most “concerned” for WCU’s finances now and later. Food costs are up, energy prices are up, and Byers says costs on materials for renovation and construction are “off the charts.” All these inflationary pressures will affect students, and since the Board of Trustees sets prices based on last year’s financial position, fees could continue to rise.
Enrollment is the other point of issue. Overall enrollment at WCU fell to the lowest for a Spring semester since 2018. It fell by 2.7% this Spring, but it started to decline last year, in 2021, because of the pandemic and its impact on student finances. Although that percentage seems small, it still matters.
Many universities, WCU included, run on enrollment. The amount of money state taxpayers chip in mirrors enrollment numbers. When enrollment is down, funds are cut off and wasted away. When enrollment is up, however, the institution collects more money and can fund more services. Due to WCU’s recent enrollment downtrend, state-funded allocations followed suit and sank. The university will have to adjust to this.
The way things stack up
WCU’s finances were hardly in good health when the pandemic inflicted a bout of financial fit upon the institution. Still, as things turn back to normal, the university is becoming more well-conditioned. However, the implications of the pandemic continue to spell money disorder. Student fees will likely go up now and possibly later. For WCU, additional rulings on the almighty dollar will be of note.