Financial impacts of COVID-19 on higher education in California

In the last twenty years, California’s 10-campus University of California system and 23-campus state university system have seen significant declines in financial support from the state’s politicians, a trend that will only become more worrisome as California responds to the COVID-19 pandemic and economic downturn.

That was the conclusion of a panel of higher education leaders who spoke Monday as part of Berkeley Conversations: COVID-19, a series of live online discussions between subject-matter experts.

The panel included George Blumenthal, director of UC Berkeley’s Center for Studies in Higher Education (CSHE), James Hyatt, senior research associate at CSHE, Joseph Castro, president of California State University, Fresno, and Nathan Brostrom, interim chancellor at UC Merced.

The group described two higher-education systems that have managed to dramatically increase enrollments over the last two decades, despite significant declines in state support per student. The COVID-19 pandemic will do nothing to change that, all agreed.

Hyatt said there are lessons to be learned from how universities experienced the great recession in 2009, arguing that in 2020 there is, “a need for temporary operational bridge funding to allow schools to adjust to a new reality.”

Brostrom, who previously served as executive vice president and chief financial officer for the UC system, pointed out that, “In 2008, we increased our out-of-state enrollment as one way to deal with the financial crisis. We went from 5% to 18% non-resident enrollment.”

Many California state universities have seen students leave the tight confines of residence halls, and, as a result, have lost housing revenue that often subsidizes other campus operations, Brostrom and Castro said. Similarly, campuses with large intercollegiate athletic programs are experiencing a major loss of revenue.

Despite the revenue losses, both Brostrom and Castro said their campuses have worked successfully to ensure that all of their students continue to have access to online offerings.

“We distributed 3000 iPads and set up hot spots in rural areas,” Castro said.

All participants agreed that the federal government has a major role to play in the recovery of universities.
“Higher education institutions across the nation will need additional support from the federal government in the coming months and years,” Castro said. “We are part of the solution for California and the nation as we emerge from COVID-19, because of our strong focus on social mobility for students from all backgrounds.”

Berkeley Conversations: COVID-19 is a live, online series featuring faculty experts from across the Berkeley campus who are sharing what they know, and what they are learning, about the pandemic. All conversations are recorded and available for viewing at any time on the Berkeley Conversations website.