March 20, 2020
Read time : 5 min

Universities across America are facing grim statistics amid the coronavirus outbreak. Voluntary social distancing and state-wide stay-at-home orders are forcing a sudden shift in the higher learning landscape that is threatening the stability of the entire system.

Nearly 19 million students are enrolled in colleges and universities across the country, and this pandemic has negatively affected many of them.

Coronavirus creates an unprecedented interruption

Some institutions are scrambling to transition to an online program while others are closing doors for the rest of the semester. Many universities have canceled in-person classes and have closed dorms to comply with social distancing directives. This introduces a plethora of challenges for students and entire institutions alike.

Graduation ceremonies have been canceled or postponed indefinitely and academic progress has been all but halted for many students. Internships and clinical rotations have been suspended, leaving countless students under the minimum required credit hours to graduate. In many instances, they fall below the number of credit hours required to be considered full-time, which can affect eligibility for future course work and financial aid.

What's the financial impact of the coronavirus pandemic?

In the midst of this pandemic, many institutions are left to make their own decisions about tuition refunds. Some universities are pro-rating tuition for students who have been forced to vacate, provided they can offer an online program. Others are refunding room and board expenses that have been paid in advance.

Depending on the individual decisions of each university, refund amounts could total millions, threatening the very existence of many institutions. Furthermore, the additional unexpected costs associated with going virtual could prove to be too much for smaller colleges already on the brink of closure.

With uncertainty looming, nobody knows how long the closures will last. Summer is right around the corner, threatening to make this semester a total wash for some colleges and students. Administrations are unsure how many students may elect to return to college in the fall.

Additionally, plunging markets mean colleges can't rely on endowments, and the revenue losses coupled with rising costs and the shift to virtual classes earned higher education a downgraded outlook from stable to negative for 2020.

Is student debt relief on the horizon?

President Donald Trump announced the Department of Education will temporarily suspend accruing interest on federal student loans to offer some financial relief. The Department of Education Secretary also announced a 60-day reprieve on student loan payments.

Unfortunately, this doesn't offer much relief for borrowers who can already request their loans be put into forbearance or deferment. Those who do want to take advantage of the 60-day payment relief must call and request help.

What's the catch? Both major student loan servicers - FedLoan and Granite State Management and Resources - have closed call centers due to the pandemic, leaving borrowers with no way to get the help they desperately need. In the meantime, many students are still being charged interest on their student loans despite this announcement.

Rising costs, higher tuition and stay-at-home orders are threatening to collapse the higher education system as we know it. It's time to get involved in the financial policies concerning higher education and student loans. Join our initiative with Up To Us to be a part of the solution.