University of Minnesota could take $315 million hit from coronavirus
The University of Minnesota is facing up to a worst case scenario of losing more than $315 million a result of the coronavirus pandemic.
The financial hit facing the university was laid bare at a remote Town Hall for students and staff on Tuesday, in which three possible outcomes were presented based on the severity of the outbreak in Minnesota.
Here are the scenarios and the corresponding revenue loss experienced by the university across its five campuses:
– Summer and fall activities resume as normal: $77 million loss. (Though the U of M just canceled in-person instruction for its summer classes).
– Reduced operations during the summer, return to normal by fall: $163 million loss.
– Disruption continues into the fall semester: $315 million loss.
Of the $315 million loss, around $90 million would come from tuition – which President Joan Gabel has said she intends to freeze next academic year – with a further $75 million coming from athletics, $60 million from events, and $40 million from room and board.
What's more, the estimated losses don't include the full refunds for room and board the university is now offering students who left campus part-way through the spring semester due to the end of in-person instruction and subsequent Stay at Home lockdown, which will cost the U a further $35 million.
As part of cost-cutting efforts, Gabel and her cabinet are taking a voluntary 10 percent salary cut starting July 1, while 200 senior university leaders will take one full week of unpaid work before June 30.
A salary freeze on merit increases for 2021 is also being considered. Taken together, these efforts are expected to save the university $40-50 million.
"I am grateful for the immediate willingness of system leaders to make personal financial sacrifices, and in their work for the good of our students and our University as a whole," Gabel said.
"The University’s contributions to our community and to the world only happen because of the creativity and commitment of faculty, staff and students. While we know we will face more difficult decisions as this pandemic unfolds, we will continue to serve the institution we are all so proud to be a part of and that our community deserves."
