By Kirk Carapezza
Over the past few weeks, Hampshire College President Ed Wingenbach has been working remotely from home, occasionally going into his office on the ghostlike campus in Amherst. “It is not like ‘The Shining,’” he said. “But it is very quiet.”
Even before the pandemic, many small private schools like Hampshire were facing a financial situation reminiscent of the nightmare in the Stanley Kubrick film. Wingenbach said the college had figured out how to survive, launching a $60 million fundraising campaign led by Hampshire alum Ken Burns, the documentary filmmaker.
“It was just a question of being really disciplined about how much we spend and how we allocate our resources,” Wingenbach said.
But the pandemic has shaken the financial stability of most private and public colleges. Collectively, they owe graduating students millions of dollars in refunds for room and board — returning students are being offered credit toward next year’s housing instead of a refund, to cushion the blow of the losses. The outlook is so bleak that Moody’s Investors Service changed the credit rating for higher education from stable to negative a few weeks ago.
Many colleges that were already operating on the brink, like Hampshire, worry about enrollment declining this fall and their ability to continue to pay staff and faculty. If the pandemic drags on into the summer and fall, more colleges could order layoffs — or even go out of business. A survey of college presidents conducted for Inside Higher Ed found that about four in 10 didn’t predict that in-person classes will resume by the fall semester.
“I think schools are staring down a situation where they need to retain cash, frankly, to remain solvent,” said Michael Horn, co-founder of The Clayton Christensen Institute, which studies innovation in higher education.