Pandemic could cost US universities $183B

Universities across the U.S. could find themselves with budget gaps nearing a combined $200 billion as they look to recover from the coronavirus pandemic, according to a researcher at the University of North Carolina at Chapel Hill.

Posted 1:18 a.m. Feb 9, 2021 — Updated 1:19 a.m. Feb 9, 2021

Keely Arthur

, WRAL reporter

CHAPEL HILL, N.C. — Universities across the U.S. could find themselves with budget gaps nearing a combined $200 billion as they look to recover from the coronavirus pandemic, according to a researcher at the University of North Carolina at Chapel Hill.

Paul Friga, a professor at the Kenan-Flagler Business School, said Monday that the cost of keeping campuses open and safe is likely the smallest part of the growing financial hole universities face.

He pegs that at about $24 billion, while lost tuition and other revenue cuts will be about $85 billion and decreases in state funding to higher education could present an additional $74 billion blow.

"We could be looking at $183 billion in decreased resources in higher education," he said.

UNC-Chapel Hill to cut personnel, spending to address pandemic losses, long-term deficit

Universities need to act quickly to save themselves over the long run, Friga said.

"It’s no surprise that the majority of money spent within a university is personnel. So, that’s going to be 70 percent of your expense base," he said. "We really got to get aggressive about cutting programs."

UNC-Chapel Hill last month laid out plans to cut personnel costs by 3 percent and operating expenses by 15 percent over the next two years to make up about $200 million in losses incurred during the pandemic, as well as other deficits.

Friga said consolidating workers in departments such as information technology and human resources within university systems and identifying academic programs with few students and high faculty costs will likely be among the first cost-cutting efforts at many schools.

He also advocated for innovation, saying institutions remain stuck in old practices and need to provide more unique learning opportunities to keep attracting students to campus and higher education.

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