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John Harvard's Journal

The Coronavirus Campus

The factors influencing the fall semester—and beyond

July-August 2020

As Harvard leaders—and their higher-education peers nationwide—make early-summer decisions about the academic year to come, they confront extraordinary uncertainties, with little useful guidance. The Great Recession and after were financial crises, highlighted by the collapsing value of the endowment, and resolved in time by belt-tightening, economic and financial-market recoveries, and copious fundraising. The COVID-19 pandemic is a health crisis requiring that students and teachers be separated from one another and from campus, as researchers are from laboratories, libraries, collections, and field work—thus impeding every aspect of a university’s work. That has raised costs and crimped revenues—a follow-on financial threat exacerbated by the virus-precipitated severe recession. The University must envision anew how to operate safely in this context by fall, and within its distinctive community and resources.

How to teach? The headline decision for every college and university is whether to aim for residential education by summer’s end; rely on remote instruction (improved from the offerings cobbled together under duress last March); somehow mix the two; or adopt an altered schedule and program. The California State University system announced early that it will be online this fall. Notre Dame plans to begin the semester in residence in early August, operate continuously until Thanksgiving, and end the term then. Stanford, on the quarter system, will open on time and allow undergraduates to be in residence two of three quarters, but with online teaching the “default” throughout the year—perhaps a less feasible option for Harvard’s semester system. And some schools may opt to invite certain cohorts to campus (freshmen, seniors, those who need labs or performing-arts facilities), but not others—or have students attend on a staggered basis.

These models merited attention at Harvard because its schools’ student bodies and pedagogies vary, meaning they might not all adopt the same instructional model. Provost Alan M. Garber advised the community on April 27 that “Harvard will be open for fall 2020” (see harvardmag.com/fall-plans-20). But he added: “[W]e will need to prepare for a scenario in which much or all learning will be conducted remotely”—and pointed to the possibility of “different approaches to learning and research” among the schools.

Indeed, on May 13, Harvard Medical School dean George Q. Daley and senior colleagues announced that “fall 2020 courses will commence remotely for our entering classes of medical, dental and graduate students” and for external education programs. They hoped “to be able to hold in-person research and clinical experiences for our returning medical and graduate students.”

The large next shoe dropped on June 3, when the Graduate School of Education announced it would be online for the 2020-2021 academic year, and the Graduate School of Design (GSD), Divinity School, Harvard T.H. Chan School of Public Health, Kennedy School (HKS), and Law School (HLS) all announced online operations for the fall term. (See harvardmag.com/covid-onlineschools-distributiondown-20 for a full report.) The Faculty of Arts and Sciences (FAS; comprising the graduate school, College, and school of engineering and applied sciences) and Business School (HBS) are on deck.

Who will enroll? Given its fiercely selective admissions and the perceived value of a Harvard education, the University is well-positioned to attract students (and enable them to attend regardless of financial need)—major advantages. Institutions of higher education nationwide report lower rates of acceptance than anticipated; vocal resistance to matriculating if instruction is online (and to paying full tuition if so); and, of course, health concerns. A survey of 10,000 students conducted after an Inside Higher Education report on options for fall instruction yielded 78 percent of respondents who found in-person classes “appealing”—but less than one-third judging any online-only alternatives similarly.

If safety issues dictate remote learning, some undergraduates may opt for gap years or other leaves; the Yard and House residences, common dining halls, and larger lecture classes are all antithetical to social distancing. (Ironically, of course, fewer attendees in the fall would simplify measures to “de-densify” the campus for those who are present—perhaps accommodating some in those emptied professional-school facilities.) The graduate and professional schools may present lesser enrollment challenges. All across campus, the welfare of faculty and staff members considered at high risk also weighs in the planning.

Another calculus comes into play for international students. Many borders are closed, many flights are grounded, and the United States has shut down visa issuance. About 800 undergraduates (12 percent of the total) are international—but about one-third of the Graduate School of Arts and Sciences cohort are from outside the United States: a significant number of research and laboratory assistants, and instructors of undergraduates. [Updated after the magazine went to press: In early June, President Lawrence S. Bacow wrote to federal officials to urge the administration to “reconsider any plan to suspend or restrict nonimmigrant visas and their work authorizations, including for international students, scholars, and specialized workers.”]

Those obstacles loom even larger for some of the professional schools: HBS (37 percent of M.B.A. candidates); HKS (48 percent of degree candidates, including more than three-quarters of those in one program); and GSD (55 percent of degree candidates). Even HLS, with its largely U.S.-focused curriculum, has a significant number of international J.D. candidates (14 percent) and a large cohort of international LL.M. students (typically, 180 annually).

The latter three have made their decision: atop health concerns, with the borders shut, de facto or de jure, they clearly faced a radically smaller resident cohort and a very different student body and classroom experience. Schools dependent on tuition income may face transformed finances as they support remote teaching while preparing to resume residential classes (see below on students’ choices). HBS announced on April 27 that students admitted for this fall (the M.B.A. class of 2022) may defer their enrollment for one or two years; vacant spots will be filled, if possible, from the waitlist—but the school is willing to have a smaller class than usual.

What are the economics? The University has estimated that revenue would fall $415 million short of expectations for the fiscal year ending this June 30, and a further $750 million short of the expectations built into the budget for fiscal 2021, drawn up just a few months ago (see a full report at harvardmag.com/750m-shortfall-20). In her May 5 note conveying the news, executive vice president Katie Lapp cited spring-semester room and board refunds; cancellation of residential continuing- and executive-education programs; and the loss of research funding as labs closed. Revenue for the fiscal year now ending might have been about $5.8 billion pre-coronavirus, rising to perhaps $6.1 billion in the year on deck—implying shortfalls of 7 percent (all coming in a rush late in the semester) and a further 12 percent, respectively.

Because Harvard committed to pay idled staff members and contractors (dining and janitorial workers, research assistants, security guards) through June 28, the forgone revenues were not equally offset by expense reductions, so operating surpluses will be reduced, or turn into losses. Looking into the next year, Lapp raised the possibility of furloughs or layoffs—likely if housing, dining, and other facilities are not in use.

Executive education. The evaporation of continuing and executive education illustrates how the 2020 pandemic differs from the purely financial upheaval a dozen years ago, and puts these daunting sums in context. Netting out financial aid, Harvard received about $500 million in continuing-education revenue in fiscal year 2019—nearly half from HBS’s powerful franchise. (FAS’s extension operation ranks second in size.) With the suspension of residential teaching, HBS’s executive-education business essentially vanished from March through at least this summer. That abrupt upheaval, plus slower publication sales and reduced philanthropy, lowered expected revenue for this fiscal year by $115 million (see harvardmag.com/covid-schools-response-20). The school telegraphed in April that its budgeted $43-million surplus would turn into a $22-million deficit, but by early May forecast savings and spending cuts that could yield a break-even year, or perhaps even a small surplus. In fiscal 2021, HBS anticipated “an even larger drop in revenues,” reflecting executive education and other pressures—implying “a potential deficit for the year of as much as $80 million.” For details across the University, see harvardmag.com/exec-ed-losses-20.

Degree-program tuition. In fiscal 2019, HLS, the GSD, and HBS derived 45 percent, 42 percent, and 41 percent of their operating revenue, respectively, from tuition (including executive education). The FAS, in contrast, got 50 percent of its operating revenue from endowment distributions, and just 23 percent from student income (including extension). HBS’s leaders alluded to potential pressure on M.B.A. enrollment, and therefore tuition income—but the ability or willingness to enroll this fall of the heavily international student bodies at now-online schools such as the GSD and HKS is obviously consequential as well. HLS has to be monitoring its census very closely, too.

Research. Harvard scholars receive more than $900 million in sponsored support for research annually: about one-sixth of consolidated revenues. Programs focused on the coronavirus obviously are proceeding at full speed (see page 18), but other activities dependent on laboratories, collections, or field work are operating minimally, or not at all. Funds have been available to sustain staff during the enforced shutdown, but at some point, the work must be pursued; absent supplemental federal appropriations or other income, faculties will have to make up the gap from elsewhere in their budgets.

Other losses. HMS—which derives more than 60 percent of revenue from sponsored-research support and endowment distributions—has other vulnerabilities. On May 7, Dean Daley advised the community that HMS would incur losses of $39 million to $65 million in fiscal 2020. He cited executive-education shortfalls, but most prominently, a strategic use of HMS’s resources: “our decision to stand in solidarity with our affiliated hospitals…by forgiving their FY20 contribution to HMS, which totals $31 million.” The affiliates, incurring reported multibillion-dollar shortfalls in revenue as they devoted their resources to caring for COVID-19 patients, are the school’s major clinical teaching partners—so this action represents an investment in both the future of medical education and the hospitals’ foundational mission as care institutions.

The endowment and philanthropy. With the endowment’s value likely reduced, the Corporation will cut the funds distributed in fiscal 2021 by 2 percent, and further assess distributions by 3 percent to pay for coronavirus costs—reversing the recent annual growth in revenue from that source. (Read a full explanation at harvardmag.com/covid-onlineschools-distributiondown-20.) Also of immediate moment may be the fiscal effect of the pandemic on donors and their potential interest in new needs revealed around the planet. There are indications both that campaign-fueled largess had already crested (current-use gifts to FAS declined 14 percent in fiscal 2019) and that some major donors are reassessing their priorities. And of course President Lawrence S. Bacow, the deans, and development professionals have been grounded since March, limiting their opportunities to outline Harvard’s evolving priorities.

Higher costs. Finally, the COVID-19 campus differs from its predecessor. Hardening Harvard against the virus and modifying operations imply continuing expenses. Deans thus find themselves learning about enhancing ventilation to increase indoor-air exchanges, retrofitting doors and bathrooms for hands-free operation, and perhaps bolting down furniture to enforce safe distancing. Laboratory staffing may have to be altered, and personnel equipped with shielding and protective equipment. (Given local orders suspending construction from April into late May, the engineering and applied sciences faculty deferred its planned summer move to its Allston facility until January; see harvardmag.com/seas-move-deferred-20.)

And with fully residential teaching deferred, the hurried training in Zoom and redesign of class exercises of March must morph into something more thoughtful and engaging—requiring further heavy investment in remote instruction, but perhaps leading to new pedagogies in the future.

WWYPSD? What will peer institutions do? Circumstances differ, even among academically similar universities. Columbia and Harvard are embedded in dense urban areas that are world travel portals—and New York and Boston became intense COVID-19 hot spots, with widespread infections and mortality. Employees in both cities depend on old public transit systems to get to work. Yale, Brown, and Penn appear less acutely affected, as does Stanford, given California’s swift response to the emerging pandemic. Matters look different from Princeton, and even more so from the relatively distant, rural perspectives of Cornell and Dartmouth.

In the past, the Ivies and Stanford may have been inclined to proceed on a mutual path. Now, given their very distinct community coronavirus profiles (and their differing academic compositions and financial circumstances), there may be no united H-Y-P front, nor an Ivy or Ivy-plus solution, at least this fall. If similar universities do follow separate paths, that may echo the differences even among schools within Harvard—further disorienting results of a health crisis without precedent for this residential teaching and research institution.

Challenges like these led one University leader to say, “It’s hard all around.” If waves of COVID-19 illnesses recur until an effective vaccine is deployed, perhaps in 2021 and 2022, even a Harvard cannot sustain its pre-coronavirus way of operating while simultaneously offering a full-featured remote education and overhauling research facilities. Instead, some administrators say, a whole new model for the academic enterprise would have to be created. The community will know soon what the fall holds—but that may only begin to hint at what impends for the rest of the new academic year, and likely beyond.

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