U of M to see huge revenue losses due to COVID-19

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MINNEAPOLIS (KARE) – The University of Minnesota will lose tens of millions of dollars in revenue due to the COVID-19 pandemic, school president Joan Gabel acknowledged in a virtual town hall on Tuesday, which she said may force “tough choices” in the months ahead.

With all five campuses moving to online classes for the spring and summer semesters, the university will likely suffer from lost tuition dollars, lost fees, plummeting athletics revenue, canceled events, and a drastic reduction in clinical income.

“It’s not pretty,” Gabel told students and faculty in an address streamed on YouTube. “No one is surprised to hear that.”

Although the exact financial impact cannot be measured yet, Gabel asked her leadership team to analyze three potential COVID-19 scenarios:

1) An unlikely “best-case” scenario where operations return to normal this summer, which could result in an estimated $75 million in lost revenue

2) A “moderate” scenario where COVID-19 disruptions last through summer and linger into the fall, which could result in an estimated $160 million in lost revenue

3) A severe scenario where the pandemic largely disrupts the fall semester, which could result in an estimated $315 million in lost revenue (This scenario accounted for a significant enrollment drop in fall 2020, possibly as large as 20 percent for freshmen starting out of high school)

“It’s enormous,” Gabel said, “and also, only a projection.”

Despite the uncertainty about the future, the university has already implemented a number of cost-saving measures. Gabel, her cabinet, and many other university leaders have decided to cut their own pay, the school instituted a hiring freeze (with exceptions for employees who could aid the COVID-19 response), and refunds or reimbursement for canceled events may be an option.

Federal and state relief could also be on the way. Charitable donations may bolster an emergency aid fund for students. And many departments have reserves and balances they can dip into.

“We were in very good financial strength when this started,” Gabel said. “We have a leadership team that’s experienced, and it should put us in a position to emerge stronger than ever.”

Amid its own financial difficulties, the Board of Regents also voted Tuesday to extend housing, dining, and other fee reimbursements to students dating back to the end of their spring break in mid-March. At the very least, they will continue online courses through the end of the 2020 summer semester, with no tuition refunds planned at this time.

For Class of 2020 seniors, a traditional commencement will also not be possible this spring due to social distancing. However, President Gabel said a virtual commencement of some sort could be in the works, coupled with another event in the fall if circumstances allow. Details will be forthcoming, Gabel said.


https://www.msn.com/en-us/money/news/u-of-m-to-see-huge-revenue-losses-due-to-covid-19/ar-BB12ikuw

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