Institute braces for $60 million in revenue loss
No plan to reduce tuition
President Shirley Ann Jackson announced that Rensselaer is expecting a revenue loss of $60 million due to the coronavirus pandemic during the Spring Town Meeting held May 15 via Webex. The anticipated loss includes both Fiscal Year 2020 and 2021.
Jackson attributed the loss to the closure of dorms and dining facilities, the cost of transitioning to remote learning, the cost to “ensure the health and safety of our faculty, staff, and students,” and the expected decrease in philanthropy.
RPI’s total revenue for FY 2018—the most current information publicly available—was $591,700,082, which means a 60 million dollar loss over two years equates to a 5.05% decrease in revenue over those two years.
Chief Financial Officer Barbara Hough also addressed this loss in revenue during the town meeting, stating that RPI is “taking the appropriate level of cost control and associated actions to ensure that we can adjust to those potential shortfalls.” As laid out by Hough, Jackson, and others during the town meeting, these actions include RPI’s decision to furlough nearly 300 staff, reduce the pay cut of the leadership team by 5%, suspend hiring, stop merit increases, and suspend research sponsored positions and stipends for grants after May 16, unless they are fully funded by a grant or contract. Since the town meeting, RPI did not renew some staff contracts, effectively laying-off 200 employees, and an undisclosed number of adjunct positions.
Hough elaborated that the Institute is not planning to take any additional long-term debt to help compensate for the loss, but added that there are thoughts about drawing more money from the endowment which was $739.6 million as of FY 2019. A supplemental draw from the endowment would require approval from the Board of Directors.
Hough also addressed the topic of tuition, stating “there are no plans at this time to reduce tuition,” justifying this with: “We continue to deliver a Rensselaer quality education.” She also explained that the current plans of operation for the fall semester—which include biweekly coronavirus testing, social distancing procedures, and required masks—are added costs for the Institute, so tuition reduction “is not a consideration at this time.”
Hough then discussed RPI’s plan for the grants received from the CARES Act. The CARES Act is a stimulus package that, in part, grants colleges the ability to apply for federal grants based on the college’s student population, with colleges that have a higher number of Pell Grant recipients qualifying for larger grants. The amount determined from these metrics is then split into two pools, one which provides financial aid in the form of grants to students and the other a direct grant to the college. The act states that no less than 50% of the total accepted money will go towards student grants.
The CARES Act prevents colleges from using student grants to reimburse themselves for any refund of room and board, fees, or any other cost to move students to remote learning. Colleges are additionally blocked from using the student grant money to reimburse themselves after paying students for work-study.
In contrast, there are few rules as to how colleges can spend the institutional portion of the grant, with the only major requirement being a college cannot use this money to increase the financial aid of students who were exclusively taking online classes before the coronavirus pandemic.
RPI qualified for $4,828,782 with a minimum of $2,414,391 going towards student grants.
Hough announced that RPI applied and was granted the student section of the aid with the Institute “finalizing the allocation of the aid to our students with the highest need,” and that there will be more communication regarding this in the future.
A CARES Act report, filed last Thursday by RPI, announced that around 3,988 students were eligible to receive the act with 1,485 students ineligible and 1,632 unable to determine their eligibility. According to the report, RPI “ is currently finalizing its methodology” for awarding the grants, and “the amount of individual awards have not yet been determined.”
Hough added that RPI has not, but intends to, apply for the institutional portion of the aid, in order to offset “the cost of the transition to remote learning,” and “the cost of bringing everyone back to campus.” RPI has not filed for institutional aid as of the filing of the report, and the CARES Act page on RPI’s COVID-19 website states that a timeline to file for the aid “has not been established.”
Vice President for Enrollment Management Jonathan Wexler addressed the status of financial aid, reminding students that the financial aid office is taking appeals for an increase in financial aid due to a change in financial circumstances. He also announced that they have “allocated more financial aid over the summer...than they [the financial aid office] ever have” and that the financial aid office is “very conscious of what’s going on in the world and the impact financially...to our students.”
Wexler confirmed that if students are accepted into the coterminal program, the financial aid for RPI “will carry with you” to the graduate portion, no different than any other year.