Elected officials in our nation’s capital are deeply engaged in discussions around stimulus packages to restart our economy. And fortunately, some of the initial resources they provided ensured critical early support for students and institutions of higher education. These initial moves are greatly appreciated, but America’s colleges and universities, public and private, remain in jeopardy under current conditions — and that threat also poses a real risk to the economic recovery of our nation and Colorado.
Higher education’s contributions to economic stability often take a backseat to the prevailing impressions around research and development or providing skills to current and future workforces. But the bottom line is that universities are a very large economic and employment sector that spans red and blue states, bridges the urban-rural divide, and engages small communities and urban centers.
For comparison, the airline industry has about 750,000 workers and received a $50 billion support package in the initial stimulus package, while universities — which employ more than 2.3 million Americans — received $14.2 billion, much of which went directly to support our students in need. This support was needed, and we’re grateful on behalf of our students. But the support to help actually sustain the institutions that employ those 2.3 million people totaled some $8 billion… and has yet to be fully released.
In the meantime, everywhere university leaders turn, they see uncertainty and risk. And risk mitigation for an industry with 80% personnel costs means layoffs, as only a handful of campuses across the country have the massive endowments needed to avoid insolvency under the current circumstances. We should be deeply concerned about the possibility of losing institutions from this national network from an economic recovery perspective because they played a crucial role in the last economic recovery. In the Great Recession, federal funds allowed us to decrease personnel expenses via hiring and salary freezes, coupled with attrition rather than layoffs. That made communities with a university anchors of employment, and these communities led the recovery that followed. A similar model will work today, but that model is at risk as states work to balance budgets and fall enrollment remains uncertain.
What Colorado invests in its colleges and universities comes back to communities across our state in the form of jobs, student scholarships, and educated citizens who create and run businesses. Colorado State University alone, as a land-grant institution, supports every county in Colorado and has permanent, full-time employees working and paying taxes in nearly every county — at the Colorado State Forest Service, Extension, our Agricultural Experiment Station programs, 4-H, and on our campuses. Our research programs employ people all over the world, but the economic impact is most felt right here at home. Construction on our Fort Collins campus alone has kept thousands of local private construction workers employed for the last decade. If institutions like CSU are badly damaged or closed, each one represents a spark which will not be glowing to light the fire of economic recovery in their community, thus slowing the rate of the overall national economic recovery. And we know that if the light of public education grows too dim or is allowed to go out, a generation’s hope for a better life for their family is placed at risk — along with America’s economic competitiveness and innovation.
In the face of this challenge, CSU’s Board of Governors has endorsed the principle of using reserves and refinancing models as an initial, localized form of a “Payroll Protection Program.” But no one institution can stand alone for long against this financial storm. We now wait for additional federal flexibility that can bolster the upcoming efforts of the Colorado General Assembly and Governor to craft a budget that gives Colorado the best chance for recovery from the impacts of the pandemic. We believe Colorado’s institutions of higher education can be a resource for our students and future research, and immediately remain critical foundational employers in communities across the state.
The investments the federal government is making to secure America’s financial future in the face of this pandemic are unprecedented. Even with these, no one will be spared an impact, and universities do not expect to be.
This is not a financial crisis that can simply be weathered — without serious support, some institutions could close and all will struggle. But we stand ready to be a partner in Colorado’s and America’s recovery and remain committed to demonstrating the value of the public dollars invested in our students, facilities, and missions.
Chancellor, CSU System