With Fate of COVID Relief Bill Uncertain, Financial Future Looks Dire for Colleges and Universities
October 26, 2020

ACE and nine other higher education groups sent a letter Oct. 19 to congressional leaders outlining the “existential crisis” American higher education faces without new federal support as a result of the COVID-19 pandemic.

With the election only one week away, it is looking less and less likely that Congress will pass a new pandemic relief bill before Nov. 3. However, as the groups wrote, help is needed how—the situation for students and colleges and universities is dire and getting worse as the fall semester goes on.

“Since the start of the pandemic, colleges and universities have been overwhelmed by a combination of factors unique to the unprecedented challenges confronting students and institutions,” they told House and Senate leaders. “The bottom line is clear: to stave off catastrophic consequences, our associations strongly believe that at least $120 billion in new federal support is needed, and it is needed quickly.”

The status of a potential bill seems to change daily. Relief talks among the House, Senate, and the Trump administration have been stalled for months and seemed dead over the summer, but after Labor Day, House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin again began discussing the parameters of a possible deal.

While Pelosi said Sunday that she's still “optimistic” about Congress passing a coronavirus relief package before Nov. 3, it’s unclear whether she and Senate Majority Leader Mitch McConnell (R-KY) can agree on what that measure would look like. As Politico pointed out this morning, McConnell has largely steered clear of stimulus talks recently and many GOP senators are opposed to the $2 trillion deal being discussed by Pelosi and Mnuchin. But McConnell has recently “softened his stance a bit” though, saying he would allow the Senate to vote on a Pelosi-Mnuchin agreement if the president agrees to sign it.

For his part, Joe Biden said Friday that if elected, he will begin working during the transition to craft a relief bill that he could sign by the end of January.

The results of ACE’s latest Pulse Point survey of college and university presidents show the devastating impact the pandemic has had on institutional finances. Earlier estimates of the costs associated with reopening have proven to be far below what is actually needed, with the costs of testing, protective equipment and instructional technology and related staffing all far higher than institutions had planned.

As the groups wrote in their letter, to make matters worse, state support for higher education is being slashed as states deal with budget shortfalls, which is especially damaging to low-income students. Michigan has already cut $200 million in higher education support, while Maryland has cut $186.8 million, and other states have announced plans to make similar reductions.

If Congress does not step in soon, the consequences could go well beyond the life of the pandemic.

“If unaddressed, the ramifications will linger for years, well after our country has recovered from COVID-19,” they said. “Many students who left will not return, programs that were eliminated will not be restored, and some institutions will be forced to close after drawing down what few resources they have left.”​