Like all industries bracing for the worst of the coronavirus pandemic and its economic aftermath, universities are reeling from the fiscal impact of shuttered campuses.
On Wednesday, the University of Miami in an email announced “financial mitigation actions,” effective immediately, to reduce expenses across the university, including its healthcare system, UHealth.
“Today’s highly uncertain economic environment poses serious financial implications for our University, as well as for our health care system, UHealth,” the email read. “These are unprecedented times, which require significant measures.”
Those measures include a hiring freeze, a postponement of merit-based pay raises, significantly reduced or eliminated non-essential, non-salary expenses, delaying planned construction projects until 2022, tapping into unrestricted donor funds and expanding its freshman class from about 2,200 to 2,350.
The email, written by Jeffrey L. Duerk, executive vice president for academic affairs and provost, and Jacqueline Travisano, executive vice president for business and finance and chief operating officer, signaled more cuts could come.
“Our next phase will be to stand together to face the financial implications that lie ahead and make sacrifices to sustain our University,” it read. “We know that these steps will not be easy, and there may be additional financial measures that we may need to consider.”
In an email, spokeswoman Jacqueline R. Menendez could not give a dollar figure estimation for the total financial impact but said the health system is projected to lose “significant revenue on a monthly basis” as elective surgeries have been placed on the back burner to focus resources on COVID-19, the respiratory disease caused by the novel coronavirus.
She said these measures were taken “out of an abundance of caution” to protect the long-term viability of the university and its health system.
“The biggest financial hits will be to our health system, which has had to postpone the vast majority of elective surgeries to ensure that all our healthcare resources are going toward treating COVID-19 patients,” she wrote.
Unlike UM, Florida International University has not announced any cost-cutting measures, according to spokeswoman Maydel Santana. But it has been dealt a financial blow and is predicting a drop in enrollment.
FIU leaders have estimated a fiscal impact of nearly $29 million due to the coronavirus. The biggest costs went to refunding housing and meal plans, as well as planning for a potential 10% summer enrollment reduction.
FIU is also planning on a 1% decrease in enrollment for the 2020-21 school year, which means less revenue from tuition and fees. That alone will cost an estimated $4 million.
“We don’t know what’s going to happen to enrollment at the end of the semester,” FIU President Mark Rosenberg said on March 27 in an interview with the Miami Herald. “We’re optimistic but we have to start planning for that.”