The University of Minnesota Board of Regents gathered in a virtual meeting Tuesday to discuss their response to the COVID-19 pandemic, including a potential tuition freeze and extended student refund period.
The University estimates a total expenditure increase of $2 million to $4 million and a revenue loss of between $75 million to $315 million, said Julie Tonneson Associate Vice President of University Finance.
Last week, the Board of Regents approved a motion to refund 50% of student service fees and 100% refund of meal plans, housing, parking, and recreation and safety fees after March 28, the date of Gov. Tim Walz’s ‘stay-at-home' order. Students took to various online platforms to voice their concern with the decision. Many students said the refund date was not set early enough and should reflect the day that in-person instruction was canceled.
After review of the new proposal by President Joan Gabel, the board unanimously agreed to set the student refund start date to March 16. With the added two weeks, estimated revenue lost from housing, dining and other fees jumped from nearly $28 million to more than $35 million.
Prior to Tuesday vote, the undergraduate student government released a statement in favor of the earlier refund date, citing earlier moves by the University to cancel operations.
“MSA is pleased with the decision to adjust proration dates and we commend President Gabel and the Board of Regents for their willingness to listen to student concerns and their flexibility on this subject,” said Katy Briggs, communications director for the Minnesota Student Association. “Moving forward, we look forward to continuing our work together in the University’s shared governance to ensure that the voices of students from across our system are heard.”
Other major financial consequences abound: early estimates for athletic revenue losses range from $10 million to $75 million. Cancellations of other events and sale reductions range from an estimated $10 million to $60 million hit for the University.
To offset some of these losses, Gabel announced that she would voluntarily cut her own $640,000 salary by 10%, as will members of her cabinet, until the University returns to traditional fiscal operations. The decision that will take effect July 1.
Approximately 200 senior leaders throughout the system, including Gabel, will also forgo pay for one week this year. Faculty and staff will not receive raises, excluding union-represented staff members who are under contract with the University.
Gabel also proposed a tuition freeze for the 2020-21 school year. The proposal’s next steps remain unclear.
The University will receive about $36 million from the federal CARES act, a nation-wide economic relief bill in response to COVID-19. According to Tonneson, funds from state government are currently undetermined.
The University also has a roughly $1 billion emergency fund, although this amount is divided among many accounts, said Brian Burnett, Senior Vice President for Finance and Operations.
“We have been in ongoing conversations with the state about our needs,” Gabel said.
The board expressed concerns over falling admission and retention rates in response to the pandemic, with initial estimates reporting an approximate 10-20% reduction in enrollment in the fall.
Regents are also preparing for a scenario where classes remain online into the 2020-21 school year. That decision will likely be made in early summer, Gabel said.
“In the worst case scenario, it would be that we don’t have students living on campus right away in the fall,” Tonneson said regarding the freshman class.
Gabel hosted a COVID-19 town hall on April 7. Discussions on the budget will resurface at the board’s May meeting.
Brooke Sheehy contributed to this report.