Even as federal aid comes, unknowns remain about how COVID-19 could impact UND financially

As university leaders across the state and country continue to make contingency plans and budgetary decisions amid the COVID-19 pandemic, many unknowns still remain, even as institutions likely will be receiving some sort of federal aid

The recently passed CARES Act allocates nearly $14 billion to higher education across the country in an Emergency Stabilization Fund, according to the National Association of Student Financial Aid Administrators.

A majority of that money, or about $12.5 billion, will be allocated to institutions based on a formula that uses enrollment and each university's number of Pell Grant recipients. Students who were enrolled exclusively in online, distance-education courses prior to the COVID-19 emergency will be excluded from this calculation, according to NASFAA. Final dollar amounts will be determined by the Department of Education.

It’s too soon to tell how much federal funding the North Dakota University System will receive through the CARES Act, Tammy Dolan, vice chancellor for administrative affairs and chief financial officer at NDUS, told the Herald Friday. While various organizational estimates exist, Dolan said they are not final numbers. She said the system could hear back from the Department of Education about the numbers in the next week.

It's possible UND could receive around $5.4 million through the CARES Act, according to Jed Shivers, vice president of finance and operations at the university. He emphasizes the number is an estimate.

How those dollars are allocated and what they can be used for also is not clear, Dolan said. The CARES Act states that about half of the money has to be used for some sort of student aid, but how that aid should be dispersed is still being worked out.

“There are a lot of unknowns,” Dolan said.

But as every month passes, the system and the university will have more information about the pandemic's true impact, thus making planning easier, Dolan said.

Interim UND President Joshua Wynne said the university needs to be “judicious” as it plans for the future, knowing that the future could change depending on how the COVID-19 situation develops. There are two scenarios that could directly impact enrollment for the university, Wynne said, noting UND has been having discussions about what it might do in each.

In one scenario, the COVID-19 pandemic may not settle down during the summer as everyone hopes it does. That could negatively impact enrollment if people are more concerned about issues other than education, Wynne said.

Another, equally plausible scenario, Wynne said, is that more people decide to enroll in college to gain additional skills and competencies that they will need when the economic reality improves.

“I actually am not sure whether you know whether we'll see an actual increase in enrollment or a decrease. It’s likely going to vary by area,” Wynne said, adding he does not anticipate a decline in health professionals in the School of Medicine and Health Sciences, where he also serves a dean.

He said the program is already at capacity and he does not “see that going down for any number of reasons.” Other areas of campus could follow national trends and see a decline, such as the College of Arts and Sciences. But that college, too, could see an increase in enrollment.

“We're trying to be prudent,” Wynne said. “We're not going to open up a new program that is untested and uncertain as to what it might do. On the other hand, we're going to be very careful to try to continue and preserve programs that have the real potential for at least continuing or growing in the future.”

He added that the university needs to be “selective, smart and guided by the data.”

On June 1, incoming UND President Andrew Armacost will take over as leader of the campus. Wynne said Armacost has been involved in every step of the process.

But it’s too hard to say which scenario will play out for a few more months. And it’s too early to tell if either scenario could lead to cuts or other budgetary changes at the university.

“In our lifetimes, we've never seen a downturn like this because you basically put the economy ... in a self-induced coma, so that the country can recover from this horrible pandemic,” Shivers said. “So it's hard to know how long it's going to last. It's hard to know what the residual effects are going to be.”

Layoffs and furloughs have left millions of Americans applying for unemployment dollars. In North Dakota, more than 28,000 private-sector workers are without jobs. Whether that will translate to the public sector remains to be seen.

Gov. Doug Burgum said during a press conference on Wednesday, April 1, that his office is not yet thinking about laying off or furloughing state employees, but he noted the state will likely have to tighten its belt due to an impending revenue shortfall.

For UND, Shivers said the university’s first goal is to protect its faculty, staff and students. Its second goal is to watch its cash flow. He said the university is looking to see what expenditures, such as capital projects, it could defer. The university also is taking a closer look at what hires need to be made and which searches could potentially be put on pause for the time being, Shivers said. He also said the university is not planning to rescind job offers it has already made to people.

Shivers said the money the university will receive through the CARES Act is a “start,” as there are many financial stresses the university will be taking on throughout this process. The university’s recent decision to refund students 30% of housing and dining costs could cost millions of dollars.

“Anything that helps the universities get through ... this period is welcome. It's really critical,” Shivers said.