1,000 Cuts

Oct. 1, 2020
Schools and universities need more financial help from Congress as they cope with Covid-19
The Covid-19 pandemic brought a halt to normal school operations last spring and continues to disrupt education in the new academic year.

But even after the coronavirus is no longer a health and safety threat, it is likely to have lasting financial repercussions for schools and universities.

History tells us that education funding is often slashed in economic downturns but isn’t restored when financial conditions improve. Combined state and local funding for K-12 schools was cut significantly in the recession of 2008, and nine years later, school funding in 22 states and the District of Columbia still had not returned to 2008 levels, the Center on Budget and Policy Priorities found.

In higher education, overall state funding for public two- and four-year colleges ending in 2018 was more than $7 billion below its 2008 level, after adjusting for inflation, the center says.

Covid-19 has resulted in economic damage comparable to, if not worse than the 2008 financial collapse, and schools and universities are facing cuts, both immediate and long-term.

As of August, an estimated 668,000 jobs had been lost in the education sector compared with one year before, the center says. About 462,000 of those were in K-12 schools.

Plummeting income and sales tax revenue because of shuttered businesses and a spike in unemployment means that states—and the school systems they fund—are facing significant budget cuts in the coming years.

The center is projecting that cumulative state budget shortfalls expected from Covid-19’s economic fallout will total $555 billion in fiscal years 2020 to 2022. This does not include the additional shortfalls that local entities might experience.

In higher education, many colleges and universities may have to absorb another financial hit: Some students are delaying—or forgoing altogether—their college pursuits.

Figures from the National Student Clearinghouse Research Center, based on data from 629 institutions, show that undergraduate enrollment is down 2.5% compared with last year. At community colleges, the drop is even greater—8%.

The CARES Act stimulus package passed earlier this year by Congress provided $13 billion for education, but as the pandemic continues, it is clear that more assistance is required.

The House of Representatives has passed the HEROES Act, which would allocate $90 billion for education, but the legislation is stalled in the Senate.
Congress needs to act decisively to provide schools and universities the financial help they need as they cope with the chaotic conditions forced upon them by Covid-19. 

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