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Minnesota State Colleges and Universities bracing for more financial blows

MNSCU Chancellor Malhotra reflects on uncertain future

MARSHALL — Colleges and universities across the nation are approaching the end of another month of enduring the devastating impact of the COVID-19 pandemic on its campuses and in Minnesota.

The impact has brought challenges and unpredictability statewide, particularly from a financial standpoint.

While the overall numbers for each institution will vary, Minnesota State Colleges and Universities (MNSCU), which oversees 30 colleges and seven universities in its system, might be expecting some of the more damaging blows.

MNSCU Chancellor Devinder Malhotra said overall, the majority of the losses financially have come from refunds given to students living in on-campus housing during the spring semester and they have lost about $35-40 million during the spring semester.

“If you look at March-June 30, both in terms of additional expenses and lost revenue, the total is close to $35-40 million systemwide. Most of the losses are due to refunds we had to give to students who were living in our dorms and residential halls and had to move out as we had to move to remote delivery,” Malhotra said. “Then there are the additional expenses, whether they are the cost of moving so many courses online, the lost revenue of athletic events, summer camps and other events. Also the additional costs of sanitizing our campuses and making sure they are safe because even during all of this pandemic all of our campuses have stayed open even though there were no classes on campuses.”

As colleges and universities head into the summer portion of their academic calendars, one of the biggest areas of concern will be how enrollment numbers will be impacted. Malhotra said MNSCU provides roughly 60% of the total undergraduate enrollment in the state and it also has the largest amount of low-income students and highest number of students of color, those of native origin, veterans and first-generation students. He added many of them face challenges with pursuing their education and the pandemic has made things more difficult.

“Many of these populations like students of color, those of native origin and low-income students, they’re economically fragile and even under the best of circumstances it is difficult for them to persevere in their education given the challenges they face, but those challenges have been magnified as a result of COVID-19,” Malhotra said. “Therefore, we are focused on various ways in which we can support our students and bring them back to our campus.”

Malhotra said currently this summer, enrollment numbers are down systemwide by 8-10%, but added SMSU is experiencing just a 3.1% decrease from last year in enrollment.

“We are bracing for significant and worse impacts on our enrollment, however, what the size and scope of that decline is yet to be seen and we are still early in our registration process for fall,” Malhotra said. “We normally project our enrollments based on past patterns but there is no pattern because of COVID-19 so we are tweaking our models and rebranding our models for enrollment predictions so that it takes COVID-19 in effect.”

Malhotra added depending on the situation, they have scenarios in place systemwide that could see enrollment decreases anywhere from 5-20% and a loss in revenue from $74-$279 million.

While the impact of enrollment numbers is yet to be seen, institutions are expecting significant impacts on tuition. Students on some campuses have even been suing their institutions for reimbursement of their tuition from the spring semester.

Malhotra said they are in the process of discussing plans for the tuition for the fall semester, but knows it will still be offered at an affordable rate for incoming and returning students next year.

“For the fall semester as far as tuition is concerned, this topic is under consideration and it is and will be discussed in the coming weeks. Currently all of our colleges and universities are involved in what we call student consultations so they are talking to their student governments and looking at various options for tuition in the fall. Regardless of the outcomes of these consultations and ultimately the decisions of the board, the colleges and universities of Minnesota state will still remain the most affordable option for students,” Malhotra said. “Affordability remains one of our top priorities and we are all public institutions and we only have two sources of revenue in the state appropriations and the other is tuition revenues. We have asked the legislature for sufficient funds for us to freeze tuition but obviously the legislature session has not ended and our discussion around tuition will depend on how many resources we get towards in-state allocations and that will also play a role in what our costs will be on the magnitude of tuition in the fall.”

Malhotra made that remark during a Zoom interview session with the Independent a week before the Legislature ended its regular session. The session ended Sunday with no new appropriations for higher education. But the Legislature is expected to hold a special session in June to tackle the bonding bill.

Another avenue of making the fall semester more affordable is increasing the number of scholarships available to students. Among those scholarships are workforce development scholarships, which Malhotra said would go to students pursuing jobs of high-demand.

“Our colleges and universities are exploring the possibilities of increasing the number of scholarships that can be offered to the students. Our students received directly under the CARES Act some funds which our universities are in the process of dispersing to our students,” Malhotra said. “Beyond that, we will also offer for next year in Fall 2020, 2,200 scholarships of $2,500 or more and these are called workforce development scholarships and they are offered if students are enrolled in programs that lead to high-demand occupations such as health care, advanced manufacturing, information and technology, transportation, early childhood education and agriculture.”

While the COVID-19 pandemic has certainly taken its toll on students worldwide, their educators and professors have been impacted just as much. Malhotra said before the pandemic occurred, some institutions were anticipating job losses due to budget concerns, but added they’ve been able to keep the majority of their staff on board during the pandemic.

“There are two elements to it. One is for the pre-COVID-19, there were already some budget stressors and in response to those stresses, some of our colleges and universities were making the necessary adjustments pre-COVID-19,” Malhotra said. “On some of our campuses there have been some adjustments to the number of employees we have but those processes started before COVID-19. As a result of COIVD-19, I think we have carried everybody that was there on March 1 to the end of the current fiscal year, however going forward we are looking at the size and scope and the strategies needed to make sure we can balance the budget but more importantly that we position our institutions in a manner they can stay relevant and sustainable over the long haul.”

The future of education might be up in the air, but Malhotra said the spring semester has provided them with a lot of information to use heading into the summer and fall semester.

“There are a lot of lessons to be learned. One that comes loud and clear is that our operational designs and business models have to become a lot more nimble and flexible so they can pivot and adapt to changing circumstances in an easy, quick and accelerated manner,” Malhotra said. “That would force us to rethink what our educational paradigms ought to be, what our design of our programs and courses ought to be, the design of our delivery models ought to be and how we rethink the educational experience of the student.”

Depending on the state’s status in a few months, Malhotra said they have three scenarios in place for how they can proceed with classes.

“For fall semester, our faculty and staff are reengineering our fall courses so that we can adapt to the guidances that are provided by the CDC and Minnesota Department of Health and be able to welcome our students,” Malhotra said. “We are looking at three different scenarios; the first one is a base scenario of minimal disruption that allows flexibility in the way we offer our classes and gives us a better opportunity to have more students on campus. Another scenario is where we have to practice social distancing and safety protocols which limits the amount of students we can have on campus. The third one is the most restrictive one where we assume the stay-at-home order is still in place. So depending on which scenario is in place, we are currently ready to serve our students and welcome them to our campuses.”

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