COVID-19 will keep community college revenue down in 2021, Moody’s says

Education Dive

Natalie Schwartz

December 9, 2020

Dive Brief:

• Community college enrollment declines will cause those schools’ net tuition revenue to fall between 5% and 15% in the 2021 calendar year, according to a new report from Moody’s Investors Service.

• These schools’ public access missions will make them unlikely to raise tuition, exacerbating their budget difficulties, wrote Moody’s analysts. They gave the sector a negative outlook.

• The predictions come on the heels of another Moody’s report, which projected that higher education wouldn’t likely see a “sharp” rebound from the pandemic.

Dive Insight:

Enrollment fell 9.5% year-over-year at community colleges this fall — representing the largest undergraduate declines in higher ed, according to the latest data from the National Student Clearinghouse Research Center. Losses of first-time students were especially steep at public two-year schools, dropping 18.9%.

Lower enrollment will weaken tuition revenue, Moody’s analysts wrote. Moreover, community colleges, which tend to offer more hands-on training programs, may be less likely than four-year schools to move their offerings online.

State funding reductions could amplify these issues. California lowered allocations to its higher education general fund by almost $1.35 billion to make up for a budget shortfall, according to an October report from New America. And community colleges in Wyoming have taken a 10% reduction in state aid, with more cuts planned.

CONTINUE READING