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The University of Vermont is considering cutting jobs, salaries and benefits as the university responds to at least $15 million in immediate expenses due to the coronavirus.
UVM President Suresh Garimella sent an email to the UVM community Monday afternoon that painted a dire picture of the university’s finances and warned that the university was considering job, salary and benefits costs.
“As we are seeing at research universities across the country, including such wealthy private ones as Yale, Harvard, Stanford, and Princeton, maintaining our financial well-being may necessarily impact salaries and benefits as well as staffing levels throughout the university,” he wrote.
Garimella wrote that the university had spent almost $8.7 million on costs directly related to the virus, including expanding IT infrastructure, purchasing equipment and supplies, providing room refund credit and preparing to offer testing to the campus community.
He wrote that the university expected an additional $6.4 million in expenses directly related to Covid-19 leading up to the return of students this fall.
UVM is set to receive about $7 million from the federal stimulus package, half of which will go directly to student financial aid.
UVM switched to remote-only instruction in March, telling students not to return to campus after spring break to limit the spread of the coronavirus.
Two students filed a class-action lawsuit against the university, demanding a reimbursement for services not offered by the university during the pandemic. The university is offering a $1,000 housing credit and a prorated credit for unused meal plans.
Late last month, the university announced that it was planning for students to return to campus this fall. Deans at the university started issuing memos to faculty, which suggest that part-time and non-tenure track faculty will be hardest hit by the upcoming cuts.
Garimella wrote that the university was concerned it would see a drop in enrollment, citing national surveys that say that four-year colleges and universities can expect a 20% fewer students and that more students are choosing to stay close to home.
The university will likely see drops in enrollments and revenues since 73% of undergraduates are from out-of-state, and students will likely be more hesitant to cross state lines for school, he wrote. Vermont is also seeing a decrease in the number of high school seniors who plan to attend, another cause for concern, Garimella wrote.
The financial hit due to the virus will be higher than the $15 million in direct immediate costs caused by the virus, Garimella wrote. The university expects an estimated $20 million more in financial aid for students, a new investment to help Pell-eligible students access technology and a $5 million recurring increase in employee health care premium contributions.
If enrollment drops, the university will suffer even more of a financial hit, he wrote.
“UVM is more reliant on tuition than nearly any other public research university—73% of our general fund expenditures are paid by tuition,” he wrote. “If we experience even a half of the enrollment decrease predicted by current national surveys, we will suffer a $26 million loss of revenue, or over 7% of our general fund budget.”
Garimella said Monday on a call with the media that he hoped the hiring freeze and natural attrition of employees would allow the university to minimize the impact on staff. He said he hoped the university could avoid layoffs.
“We are exploring the feasibility of all of this, and our goal is to treat all of our employees with respect and care,” he said.
The university will do all it can to ensure cuts don’t hurt the student experience, he said.
“We will protect that above all else,” he said. “I know we can offer a strong experience.”
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