As the pandemic continues to sweep the country, many higher-educational institutions face new decisions regarding their financial situations. With an unexpected estimated $1 million loss from expenses and refunds related to COVID-19 on top of prior loans, Hastings College has had to rethink its financial strategy going forward this academic year.
With COVID-19 expenses including personal protective equipment such as masks, gloves and cleaning supplies, these costs contributed to increased spending but were offset from grants like the coronavirus relief bill and from the Department of Health and Human Services. Room and board refunds were the main loss of revenue last spring, which contributed overall to not meeting the projected budget amount. Along with this, prior existing loans total between $16–19 million. With that in mind, the college is focused on operating a balanced budget.
“When you are trying to figure out how to balance a budget, you got three levers you pull: you make cuts, you try to grow and then you also look for appropriate ways to engage plans, philanthropy and fundraising,” said Gary Freeman, executive director of the HC Foundation.
In July, the board of trustees approved a preliminary budget that introduced cuts to all areas of campus including academic programs, faculty and staff positions, extracurriculars and utility costs. Contracts with vendors and loan interest expenses were also renegotiated. The reductions resulted in a reduced projected deficit by 40–50 percent. According to Stephanie Ourada, HC chief financial officer, about $3 million was cut out of the budget from the prior year, one and half million of which was due to the personnel actions such as the hiring freeze.
The college hopes these budget cuts will help HC not only survive a pandemic but also a battle with debt. “In the past decade as enrollment went on a slow but steady decline, the college absorbed operating cost deficits. The college kept striving to move enrollment back to the 1,200-plus level and the budget was never reduced as the number of students enrolled declined,” said Roger Doerr, chair of the HC Board of Trustees. Last week, the HC Foundation completed a plan to start the reduction of the loans that cover those deficits.
To secure bank lending, the college has pledged $30 million of its approximate $90 million endowment. The endowment funds college operations and scholarships. Besides operating a balanced budget this year, the college plans to protect the endowment as much as possible.
As of Sept. 11, the college has an enrollment of 948 full-time undergraduate students and a total of 975 when including part-time and graduate students. Although it is more than the 866 last spring, the enrollment is below what the college needs to break even on revenue this year. But with a finalized budget to be approved in October and Dr. Rich Lloyd as the new president, the college sees potential for the future.
“The Board and really all our constituencies are excited with the return of Dr. Lloyd as our 18th president and believe his experiences and energy will transform the college in several significant ways,” Doerr said.
The college’s partnership with Bryan Health and Mary Lanning Healthcare brings new programs, majors, internship and career opportunities. Another new initiative will also be announced soon.
“Both of these initiatives position HC to be not only a survivor of the COVID-19 experience, but truly a remodeled and progressive college of higher education in the midwest,” Doerr said.