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U. of Michigan Prepares for Mammoth Revenue Losses
April 20, 2:10 p.m. The University of Michigan could face revenue losses as large as $1 billion.
Mark S. Schlissel, the university's president, detailed the difficulties the institution is facing and the plans to assuage them in a letter to the community.
His best estimate for revenue losses is between $400 million and $1 billion through the end of 2020.

“All of the university’s major sources of revenue are in question, and we have incurred large, sudden and unexpected costs due to the pandemic,” he wrote.
Expenses include those incurred by the university’s hospitals and clinics that are responding to the pandemic, and the loss of revenue from nonurgent medical procedures and outpatient clinics.

In response, the university plans to eliminate all nonessential expenditures, like travel and use of consultants, until further notice. It is instituting a hiring freeze and a salary freeze. Schlissel is cutting his monthly salary by 10 percent from May 1 through 2020, and several chancellors are doing the same. Other leaders will see salary reductions of 5 percent.
The university is also starting two voluntary programs for unpaid furloughs and temporarily reducing hours. Employees can apply for these programs, and will continue to receive benefits.
Construction has already been paused on campus, as ordered by Michigan’s governor. Schlissel wrote the university will reevaluate its finances when deciding to resume projects, as well as how long to delay upcoming projects.
Schlissel also addressed the university’s endowment. Many have questioned why higher education can’t use endowments to weather this storm. Much of the University of Michigan’s endowment can only be used for specific purposes, according to Schlissel, like scholarships and medical research.
“We are being challenged at levels never before seen, but I remain confident in our ability to respond with creativity and a shared commitment to our university’s mission and to one another,” he wrote. “Please stay healthy and safe, and thank you for making this university so great.”

Colleges and Universities Recommend Congress Wait to Consider Student Loan Cancellation
April 20, 1:30 p.m. Several associations representing the nation’s colleges and universities urged congressional leaders Monday to wait to consider student debt cancellation until after current discussions over additional stimulus proposals are resolved.
The associations, including the American Council on Education, wrote Democratic leaders in the House and Senate, saying that they agree there is a need to provide relief for borrowers immediately. But the groups wrote, “We believe that should more appropriately occur as part of reauthorization of the Higher Education Act.” Reauthorization is seen as uncertain to be passed by Congress this year.
Still, the groups acknowledged, “the pandemic will greatly hamper the ability of many of these individuals to repay their loans, and this in turn will strain the economy unless Congress moves quickly to provide needed, targeted relief to student loan borrowers.”
Instead of forgiving loans -- as prominent Democrats like Senator Elizabeth Warren of Massachusetts have proposed -- the groups said Congress should focus on immediate relief to borrowers in stimulus packages​. Such relief could include extending the last stimulus package’s suspension of student loan collection activities and its provision allowing zero-interest deferred loan repayments. While the CARES Act excuses repayments for 60 days, the groups said borrowers should not have to make payments until the economy recovers.

The groups also proposed extending the grace period for making loan repayments after graduation.
“Students who complete their programs in the near future will be graduating into the worst employment market since the federal student loan programs were created. Extending the post-graduation grace period for one year for students leaving school will help them gain their post-graduation financial footing,” the groups wrote.
In addition, the letter recommended borrowers taking out federal student loans only be charged a 1.5 percent interest rate, instead of the current rates of between 4.53 percent for Stafford loans and 7.08 percent for Grad PLUS and Parent PLUS loans.

New Chat Bot for FAFSA Assistance
April 20, 11:50 a.m. The College Board and Benefits Data Trust have created a chat bot to help students complete the Free Application for Federal Student Aid, or FAFSA.
The chat bot, named Penny, was created in light of the coronavirus pandemic, which has forced schools and FAFSA workshops to close, according to a news release.
Penny was piloted with a group of 380 students, most of whom were low-income or students of color, from November to February. Those who engaged with Penny asked two questions on average, and the chat bot was able to answer them for 91 percent of the students so far. Over the next month, the chat bot will become available to all students.
Penny can also help students request that colleges give their financial aid applications special consideration.

Dip in Summer Enrollment for Michigan's Community Colleges
April 20, 11:15 a.m. Community colleges in Michigan already are seeing declines in enrollment for summer courses, potentially foreshadowing a disturbing trend for the sector.
The Detroit Free Press looked at Washtenaw Community College and found that, after the two-year college announced at the start of April that summer courses would be remote, registrations for the term were down 35.6 percent compared to 2019. By April 15, the difference had gotten slightly smaller -- about 26 percent behind registrations on that date in 2019 -- but it's still significant.
The enrollment losses equate to an estimated revenue loss of $2 million for the college.
Several other community colleges in the state are facing similar problems. Much of the enrollment loss stems from technical programs that require face-to-face learning, like culinary arts or welding.

University of Arizona Projects $250 Million Loss
April 19, 10:50 a.m. The University of Arizona announced pay cuts this week to defray an expected $250 million loss from the coronavirus pandemic, the Arizona Daily Star has reported. The university said it has already seen $66 million in losses.
The cuts, which go into effect May 11, will require anyone making over $150,001 to take at least a 17 percent pay cut. Those making less will be required to take unpaid work days resulting in a 5 percent salary reduction. The cuts will last at least until June 2021. The salary decreases are expected to save the university up to $95 million.
The university already has imposed a hiring freeze, delayed merit increases, halted three building projects, withheld $22 million investment in the strategic plan and required executive leadership to take a 20 percent pay cut. Those efforts are expected to save $50 to 60 million.
The losses are the result of expected decreases in tuition, parking and residence hall payments. Tuition makes up 30 percent of the university's revenue. Out-of-state tuition is expected to fall 25 percent.

Valparaiso University Furloughs 200 Employees
April 19, 10:30 a.m. Valparaiso University in Indiana has announced that it will furlough 200 full-time and part-time employees, The Times of Northwest Indiana reported. Employees not furloughed and earning at least $48,000 will see a temporary salary reduction starting at 2 percent. Mark Heckler, Valparaiso's president, has voluntarily taken a 30 percent pay cut.
The furloughs will begin April 16 and are expected to last until July 31.
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