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Four COVID-19 Challenges for Higher Education

The spread of the novel coronavirus has rapidly upended the American higher education system. Students have vacated their dorms, classes are moving online, and graduation ceremonies have gone virtual. Yet beyond the public health considerations, colleges and universities face myriad challenges that could fundamentally alter the nation’s higher education landscape. As the economic fallout of COVID-19 unfolds, policymakers should carefully consider how federal policy can best address these challenges.

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Declining Institutional Revenues and State Budget Cuts

COVID-19 has placed enormous pressure on institutions’ balance sheets, which will likely result in school closures and could also have implications for educational quality. Colleges and universities are highly dependent on tuition revenues to fund their operating budgets, but surveys suggest that 1 in 5 would-be college students are unlikely to enroll this fall. These enrollment declines would leave the system with an estimated $23 billion shortfall for the coming academic year, in addition to an estimated 25% reduction in “auxiliary revenues” from facility rentals for conferences, summer camps, and other events.

The virus has also upended state budgets, portending cuts in state higher education funding. This is especially troubling given that appropriations still haven’t entirely recovered from the Great Recession, when per-student funding fell by more than 24%. These new declines will be particularly painful for public institutions, which rely heavily on funding from state and local governments. These schools are likely to see enrollment upswings once the virus recedes, but potentially before state budgets recover from the crisis.

Deteriorating Financial Circumstances Among Students

Around half of high school seniors and current college students report that the virus has impacted their family’s financial situation, which means many students will likely need more aid than originally anticipated. This will put further pressure on institutional resources.

There are also administrative challenges to consider. Eligibility for federal student aid is determined through the Free Application for Federal Student Aid, or FAFSA, which primarily relies on information from two-year-old tax returns—information that will now be grossly outdated for millions of students. While the Department of Education allows financial aid administrators to alter a student’s FAFSA through professional judgement, this system lacks a standardized process. Large-scale implementation would pose an administrative burden, not to mention significant action and advocacy on the part of students who must initiate this review themselves.

Quality Concerns for Remote Learning

Movement toward remote learning has raised questions about the value of online education. Media outlets have reported on the fundamental challenges facing students, many of whom do not have access to the technology or a high-speed internet connection needed to complete their coursework. But questions of quality go beyond the issue of access.

Prior to the pandemic, just over 15% of postsecondary students were enrolled in fully online programs. Research shows that students in online-only education, particularly vulnerable student populations, frequently struggle to complete their program, and on average, experience poor outcomes. Moreover, many online options cost more than traditional colleges and universities, and often do not provide students with a positive return on investment. Faculty have been challenged by this transition as well; only 50% of institutions have faculty with previous experience teaching online. While remote learning is a necessary immediate response to this public health crisis, more insight is needed to better understand the impact of widespread online learning on student access, completion, and labor market success.

Inefficiencies Surrounding Credit Transfers

COVID-19 will also likely lead to an increase in transferring credits, as current students consider less-expensive educational options that are closer to home and displaced workers choose to enroll in courses to gain relevant skills. In addition to previous college coursework, transfer credit includes other credit for prior learning, such as workplace or military training, volunteer service, or other professional certifications.

Unfortunately, institutions often fail to recognize some or all of students’ existing coursework or experience as credits. This is most commonly due to concerns that courses across institutions may not be equal in terms of content and quality, but also can stem from challenges associated with providing records of previous education or training. Technology constraints at schools frequently force students to track down and submit hard copies of these records. With colleges and universities moving online, students will need digital access to successfully get credit for their past work and learning.

Losing credits increases costs for students and can delay, or even prevent, graduation. Higher education advocates have long called for more streamlined evaluation to effectively facilitate transfer of credit and completion. In light of the current emergency, the need for fair, transparent, and accessible credit transfer options to ensure students stay on the path to graduation is even more pressing


Although the long-term impact of COVID-19 on higher education remains to be seen, it is clear that we are entering a new reality characterized by increased reliance on technology and elevated financial pressures on both students and institutions. Policymakers should examine these critical issues and work in a bipartisan manner to ensure that the system has adequate resources and provides quality outcomes for students.