Chancellor: Pandemic has cost UNC-Chapel Hill more than $100M
Posted August 28, 2020 3:55 p.m. EDT
Updated August 28, 2020 5:52 p.m. EDT
Chapel Hill, N.C. — The coronavirus pandemic's price tag for the University of North Carolina at Chapel Hill is well into nine-figure territory, Chancellor Kevin Guskiewicz said, and further losses could mean job cuts at the school.
During a meeting with faculty members and others Friday morning, Guskiewicz said the estimated economic impact of the pandemic on the university has already topped $100 million, and administrators expect to lose another $55 million this fall in housing and dining revenue now that most students have left campus.
Guskiewicz last week halted in-person classes for undergraduates, shifting them all online, because of a quickly rising number of virus infections on campus.
Administrators urged students to leave campus unless they had a compelling reason to stay – international travel restrictions, lack of internet access, and lack of a stable home situation were among the accepted reasons – and Provost Robert Blouin said Friday that about 1,500 students will remain on campus this semester.
"There will be financial impact to our university. All of higher education’s facing financial hardship because of the pandemic, and we are no different," Guskiewicz said. "This impact will be felt by all of us, but I’m optimistic that we will work through it together."
UNC-Chapel Hill has an annual budget of about $3.1 billion, so a $155 million loss amounts to about 5 percent.
But Paul Friga, a clinical associate professor at UNC's Kenan-Flagler School of Business, said those figures are "the tip of the iceberg" when it comes to the pandemic's impact.
For example, officials said the effect of the pandemic on other revenue streams, such as athletics, hasn't been determined yet.
"The financial estimates are quite dramatic," Friga said. "We are talking about personnel cuts because you can’t get these kinds of cuts at a university where 70 percent of the budget is essentially personnel without affecting people’s lives."
Blouin encouraged faculty members listening in on Friday's meeting to prepare financially for whatever could be coming.
"Make no mistake, this is going to be a very difficult time financially," Blouin said, noting that federal relief money and balances in UNC-Chapel Hill's accounts will help offset the losses this fall.
"If this were to continue into the spring, which I think we all are anticipating," he said, "there will be some challenges as we start thinking about the spring semester. Those financial ramifications are going to be even further amplified."
Guskiewicz said enrollment hasn't been affected so far by the changes on campus.
"We brought in the largest [first-year] class in the history of our university," he said. "That will help manage some of the budgetary challenges."
Still, Blouin said, UNC-Chapel Hill's finances could take a bigger hit from the pandemic than it did during the recession a decade ago.
University revenue fell by 25 percent during the recession, Friga said.
"I can’t imagine any employee wouldn’t wonder, is my position safe?" he said. "We’re going to have significant cuts to resources, but what we should do is strategically keep investment in mission-critical areas, and I know our leaders will do that."
Deb Aikat, an associate professor in UNC's Hussman School of Journalism and Media, said the anxiety goes beyond job losses.
"We are all worried that this is going to seriously affect our state’s investment in higher education," Aikat said. "We are working harder and better to make sure that we are not only, you know, trying to take care of our jobs. We are trying to take care of our students. We are trying to take care of our research mission."
Students, meanwhile, said they fear possible reductions in programs or financial aid.