By Clive Belfield, Thomas Brock, John Fink, and Davis Jenkins
For the community college sector, the COVID-19 pandemic was not like other economic shocks. Traditionally, economic downturns lead students to enroll in college at higher rates: Fiscal shocks are therefore offset by increases in tuition revenue, and college operations and institutional practices are unaffected. But the COVID-19 pandemic did the opposite: Many students stayed away from college, often because of health concerns. Colleges responded by moving teaching and advising online, and they used federal Higher Education Emergency Relief (HEER) funds to increase institutional aid to students and make other investments in campus safety and technology to stem further enrollment declines. It has now been four years since the COVID-19 pandemic broke out. With newly released institutional data from the Integrated Postsecondary Education Data System (IPEDS) (shown in the dashboard below), we can now see how funding for community colleges was affected as the pandemic played out.
In this blog post, we highlight some overall findings from the IPEDS dataset through fiscal year 2022. The IPEDS dataset covers the financial reports for each community college, including revenues per source (tuition, state/local and federal government) as well as expenditures and student aid disbursements. Our review compares community college finances in 2018 (pre-pandemic) to those in 2022 (post-pandemic).
Lower Enrollments Hurt Tuition Revenue
We start with enrollments. In the three years before the pandemic, community colleges were consistently enrolling, on average, 4,700 full-time-equivalent students (hereafter, FTEs) each year. But by 2022, enrollments were 16% lower at just under 3,940 FTEs. (Typically, community college enrollments fluctuate by +/-2% each year). Losing students affects the bottom line. Directly, tuition revenue is reduced (see below). But there are also cost consequences. To the extent that costs are fixed (e.g., in terms of physical campus size, faculty contracts, and support services), fewer students means higher average cost per student. And fewer new enrollees leads to fewer second-year students, perpetuating budgetary pressures.
However, not all colleges were adversely affected. One in ten community colleges experienced enrollment increases from 2018 to 2022, although most of these gains were modest (and in at least some cases were due to increases in high school dual enrollment students, who often enroll at a discounted price). On the other end of spectrum, one in ten colleges experienced FTE declines of more than 30%. Some of these colleges now face significant “diseconomies of scale” and will have to make significant institutional changes to remain financially viable. The picture is similarly varied at the state level, with some colleges in Massachusetts, New York, and Oregon experiencing declines of 30%. The college systems in these states may face significant financial pressures in the near future.
