Rich Universities Scramble With Coronavirus Forcing Refunds
Some of the richest U.S. universities are scrambling to come up with a new and once inconceivable calculus: how much money to refund students.
Harvard College, Princeton University and the Massachusetts Institute of Technology are among a handful of schools that plan to prorate room and board costs as the coronavirus has forced them to send students home.
The spread of the virus and responses to it are causing havoc across the economy, with companies scrapping earnings projections, markets in free fall and lawmakers squabbling about how best to address what increasingly looks like a recession this year. While higher education has been less exposed to broader financial trends, this time these institutions may not be exempt.
For students and their parents, it will be a breather from the spiraling cost of higher education, even if it’s for less than a quarter of the school year. The givebacks could mean a financial squeeze for schools, especially those that increasingly rely on student revenue to pay some of their operating expenses.
“One could imagine it costing schools something like $2,000 per student,” said Phillip Levine, a professor of economics at Wellesley College. “At a school of 2,000 students, that’s $4 million.”
At Harvard, room and board for this academic year is almost $18,000. The college has agreed to prorate those expenses as of March 15, the deadline by which students must leave their housing. Brown, Columbia and Yale universities also announced plans last week to offer prorated refunds or credits.
The schools are still formulating the plans and have provided few details, largely because they need to be individualized. At Harvard, for example, more than half of the undergraduate students receive some financial aid. Also, in some cases, those who live off campus may need to negotiate with their landlords.