While Emory has not fired anyone or slashed salaries, the trio cautioned, “Depending on the duration of the COVID-19 disruption and the depth of the economic recession, we must acknowledge that Emory may not be exempt from very difficult choices.”
Nationally, campuses are bracing for what economists and higher education analysts warn could be a repeat of the devastating 2008 recession.
Public campuses are already affected. During a conference call meeting of the Board of Regents Tuesday, University System of Georgia Chancellor Steve Wrigley said losses through the summer from closed campuses that would normally be abuzz with camps, education programs and other events, along with $200 million in reimbursement of room and board fees to students sent home in March, will set back the system about $350 million.
>> RELATED | Georgia University System losses from coronavirus expected to reach $350M
Worse news is likely ahead for public colleges that rely on tax revenues, which will decline as more Georgians lose their jobs. More than half a million laid-off Georgia workers filed unemployment claims in the previous two weeks, and that did not count the many Georgians unable to access overloaded systems or who postponed filing.
Even with their endowments, private campuses will not be immune to the pandemic’s economic wreckage. Emory’s endowment was $7.87 billion in the 2019 fiscal year.
“While Emory does have a large endowment, these resources do not serve as a reserve fund and, therefore, cannot be used to replace lost revenue. … The economic recession, triggered by COVID-19, has negatively impacted the global financial markets. As a result, we expect our endowment’s overall market value to decline, reducing the annual payout that supports Emory operations. The cost reduction measures are designed to help offset this impact so scholarships, professorships and other activities funded by the endowment can be maintained, even if the endowment provides less financial support,” said the three Emory leaders in their community letter.
The cost-cutting plan applies to Emory University, not Emory Healthcare.
Emory University is also imposing zero-based budgeting, limiting discretionary spending and eliminating activities and expenses not critical to the core missions of education and research, said the community letter.
Emory just named a new president, Gregory L. Fenves, who is now president of the University of Texas at Austin; he takes over in August.