Macalester bracing for financial impact of COVID-19

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Graphic by Katherine Irving '22.

Abe Asher, Managing Editor

Macalester is bracing for a serious financial fallout from the COVID-19 pandemic and associated recession as it plans for next year and beyond. 

In a message to faculty and staff earlier this month, Vice President of Administration and Finance David Wheaton wrote that the college may be forced to “consider actions that are more severe than any in recent memory” in order to survive in the coming months and years. 

“We have not at this point made decisions about any particular actions, but those could include: a hiring freeze; salary freeze or reduction; suspending or reducing retirement contributions; furloughs, or layoffs to reduce expenditures,” Wheaton wrote. 

“We simply need more information about enrollment and public health guidance before we can make those decisions wisely,” he continued.

Already, other colleges and universities in the state have taken more drastic steps. The University of Minnesota has frozen tuition and salary increases for the coming academic year, while senior staff at the university have accepted pay cuts. 

In his message, Wheaton relayed that the value of Macalester’s endowment has already fallen by approximately 13 percent in 2020. Given that nearly two-thirds of the college’s revenue is tied to tuition and room and board payments, next year’s enrollment numbers will dictate how the college proceeds. 

Already, certain organizations planning for next year on campus are pessimistic. 

In late March, MCSG’s Financial Affairs Committee (FAC) conducted its budgeting process for student organizations for the 2020-21 year — allocating each org a certain amount of money from the compulsory student activity fee that it collects each year. 

Given the spread of the pandemic and accompanying recession, the FAC estimated that enrollment — and thus student activity fee dollars — would drop by ten percent next year. 

FAC chair Ayushi Modi ’21 wrote in an email to The Mac Weekly that the projection was based on her own research and what other colleges are estimating.

“I also spoke with Andrew Wells, the Associate Dean of Students, and he agreed that a 10% drop was a reasonable and conservative estimate,” Modi wrote. “We anticipate this drop because after a recession, and with more than 3 million Americans filing for unemployment, we do not know how many students with accepted offers can still afford to attend college. 

“This is something we do not hope will happen, but it [is] better to take a conservative approach than to operate in a deficit,” she continued.

In an email to The Mac Weekly, Wells expressed a similar sentiment — writing that while he is hopeful that enrollment will stay steady next year, it seemed “prudent” to assume a drop for MCSG’s planning purposes. 

Director of Admissions Jeff Allen declined to comment on a potential decline in enrollment for next year, but wrote that FAC’s projection is “not one the college’s senior leadership team is using.”

However, there is ample reason to believe that the FAC projection is reasonable. Multiple sources have confirmed to The Mac Weekly that enrollment in the incoming first-year class is down from where it was at this time last year, though that could be partially due to the college’s decision to push the deposit deadline back to June 1. 

As of last week, fall freshman enrollment at the University of Minnesota was down nearly ten percent from where it was last year, while enrollment for the Minnesota State system overall was down nearly 20 percent.

Macalester has a relatively affluent student body and large endowment, giving it some degree of insulation from the effects of the recession, but communications from the college to faculty and staff have made clear that money is tight. 

Given that, a ten percent drop in enrollment would have effects far beyond student org budgets. 

For instance, while the college has not announced a hiring freeze, Provost Karine Moe wrote in an email to The Mac Weekly that the college is “attempting to limit hiring to those positions that are essential to support the student experience, that enable the central operations of the campus, or that generate revenue that will be especially important during a time of financial challenges.”

To that end, Moe informed faculty in an email on April 24 that she would postpone authorizing eight tenure track faculty searches for next year. This year’s tenure track searches that were not completed by mid-March were also postponed. 

“If we find ourselves in a position to run one or more searches next academic year, I will update the faculty on that decision at that time,” Moe wrote. 

Next year is a topic of much conversation on campuses around the country — with the unknowns outweighing by far the knowns. 

Macalester is aiming to announce its plans for the next academic year in mid-July, and President Brian Rosenberg told the Star Tribune earlier this week that the start of the fall semester could be pushed back to January in order to complete two in-person semesters.

That is just one of six scenarios that Macalester is discussing for next year’s academic calendar. Others include dividing the fall semester up into two separate quarters, breaking the year up into trimesters, or teaching three-and-a-half week blocks like Colorado College does. 

However, given the nature of residential college campuses and the U.S.’s unpreparedness for the outbreak of COVID-19, it is possible that part or all of the 2020-21 school year will have to be conducted remotely.

If that happens, some students may decide to defer their admission or take a leave of absence rather than pay full tuition for a remote learning experience. Students who reside outside of the U.S. might not be able to return to the college regardless depending on travel restrictions. 

Already, studies have found that an abnormally large number of high school seniors — as high as 40 percent — are considering taking gap years instead of enrolling in a college or university next year. Other polling suggests that some students who have already made deposits at four-year colleges or universities are no longer planning on attending. 

According to the Star Tribune, data from the Minnesota Office of Higher Education show that FAFSA applications for new students have fallen by nearly 20 percent since February. Applications from returning students have fallen by seven percent. 

Against that backdrop, Allen, admissions officers, and faculty and staff across campus have mobilized in an effort to sell admitted students on Macalester ahead of the delayed deposit deadline. 

The college has launched a new website for admitted students that includes the option to schedule one-on-one chats with Macalester students and counselors to discuss life at the college. The page also includes scores of introductory videos from faculty and staff. 

In addition, individual academic and student life departments have recorded Zoom sessions with faculty and majors introducing prospective students to their fields of study or work. 

Allen has been pleased with the effort. 

“I cannot emphasize enough the extent to which this has been a group effort backed by the incredible creativity, innovation, and dedicated efforts of Mac community members,” Allen wrote. “This isn’t surprising, but it’s heartening to see how many Mac students, staff, and faculty have volunteered their time and talent.”

The stakes are high. 

“If we were to experience a 10% decline in the number of enrolled students (200 fewer than normal) in any particular year, the impact on tuition, room and board would be sizable,” Wheaton wrote in his message to faculty and staff.

“Adjustments to expenses would of necessity become a part of our planning,” he continued. “It is possible, or even likely, in this scenario that the reserves would not meet all of our needs.”

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