Colleges have utilized Higher Education Emergency Relief Funding (HEERF) to help offset additional expenditures related to the COVID-19 pandemic and to help students lower the cost of their education since March of 2020, when the Coronavirus Aid, Relief, and Economic Security (CARES) Act was approved by Congress. The funds which were approved and distributed through the CARES Act, the Coronavirus Response and Relief Supplemental Appropriation Act (CRRSSA), and the American Rescue Plan Act (ARPA) have been expended and now Trustees are asking, “What does normal look like going forward?”
HEERF money helped institutions by offsetting additional costs associated with responding to the COVID-19 pandemic, such as additional cleaning supplies, adding additional information technology infrastructure to respond to the remote working and learning environment, and employing additional professors and staff to enforce social distancing. Colleges were also allowed to utilize federal funds to offset “lost revenues” associated with the pandemic. Some of the lost revenue was attributed to students who were unable or unwilling to attend college during the height of the pandemic. However, some of the lost revenue was due to the current decline in higher education demographics. Management must determine if tuition fees should be raised to help offset potential deficits and review offerings for financial feasibility now that HEERF money is no longer available.
HEERF was also available to assist students financially. Students received cash stipends for extraordinary need during the pandemic. College management will have to monitor enrollment to determine if the students who began taking courses with the added incentive of cash grants will continue their studies or if the recipients can no longer afford their higher education. Potential data mining that could be completed include determining how many HEERF recipients finished the semester and how many HEERF recipients enrolled in the subsequent semester. This can be compared to pre-pandemic student trends to see if the HEERF award assisted with student retention. Additional data mining techniques could be employed to determine the demographics of the students who are attending college pre and post pandemic. This could drive marketing campaigns if that demographic has shifted. Demographic information could include location, age, gender, type of major, full time vs part time, remote or onsite, college experience, or work history. Any information the institution collects could help fine tune marketing as well as when and what types of classes are offered.
Colleges will have to carefully review their next budget to ensure that student tuition and fees and government revenues cover their projected expenditures. Colleges should review their course offerings and programs to ensure they have an appropriate selection of courses in order to attract students. Information technology and data analytics, healthcare, teaching, and engineering are all growing fields and these programs should be invested in. There are also research and development grants from various government agencies that could be useful in supplementing revenues, along with state grants.
HEERF funding helped many colleges through the worst of the pandemic and helped create a soft landing. The next few years will be difficult as colleges learn how to stay financially fit without the ability to draw on HEERF funds. Maher Duessel is here to serve as your trusted advisors. If you would like to discuss budgeting and forecasting future periods, feel free to reach out to us for additional information and discussion.