Spring Hill College employees were told the school was considering almost year-long furloughs and layoffs, as the COVID-19 pandemic has worsened an already tenuous financial situation at the Jesuit institution, President Joseph Lee wrote in an email to workers Thursday.
President E. Joseph Lee II, PhD said in a statement after being contacted by Lagniappe the actions were being considered to overcome “unprecedented costs” associated with the COVID-19 pandemic.
“We are not alone in this,” Lee said in the statement. “Many colleges and universities – locally, regionally and nationally – are facing these costs and have already made these budget decisions. However, it does not make these considerations any easier. No matter what, we will maintain our mission as a Jesuit, Catholic college and our commitment to bring the best education to our students.”
In the email obtained by Lagniappe, Lee wrote the college anticipates a $4 million budget shortfall for the 2021 fiscal year caused by a number of factors, including issues surrounding the novel coronavirus and an ongoing decline in the student population.
“There has been a steady decline in our enrollment over the last several years,” he wrote. “For (the) fiscal year ending June 30, 2015, we enrolled approximately 1540 students. We are currently under 1300. There are 309 students deposited for the fall of 2020.”
In addition to a decreasing number of students, tuition for those who attend has been deeply reduced from what is advertised, Lee wrote.
“Since the discount rate per student has risen to an average of roughly 74 percent per student in order to get them to enroll, our net revenue has not been able to keep up with expenses,” he wrote.
Tuition and fees, according to SHC’s website, clock in at $41,868 per year. With room and board it’s $55,930. But a 74 percent discount would mean on average the school is only getting $10,886 per student for tuition and fees.
Lee wrote that the college has “no significant cash reserves to fund budget shortfalls,” due in part to room and board credits given to students.
“In the spring of 2020, room and board credits were issued to all freshmen, sophomores and juniors because of closing the campus and all students returning home to finish the semester,” Lee wrote. “These credits, which totaled over $1 million were applied to their student accounts and will reduce the incoming cash from students in the fall.”
To help “close the gap” Lee wrote that he and members of his cabinet will take pay cuts. In addition, each department will undergo a review of expenses to eliminate “any possible operational expenses.”
“While these two measures are important, they did not mitigate the fiscal year 2021 budget shortfall,” he said. “To do so, the (c)ollege will initiate furloughs, salary reductions and layoffs in addition to hiring freezes and only essential spending.”
All employee travel will have to be approved by the school’s vice president, Lee wrote. The changes will be finalized the week of July 20, he wrote, and go into effect Aug. 1. The changes will impact paychecks starting on Aug. 21.
In an email to graduating seniors, the college announced it had cancelled its upcoming commencement exercises, due to the health risks related to COVID-19. The graduation ceremony was slated to take place July 25.
Lee wrote that the college did receive some funding from the Coronavirus Aid, Relief and Economic Security (CARES) Act, but it wasn’t enough, or wasn’t able to be used, to close the budget shortfall.
Two payments of $680,000 to the college from the CARES Act either went directly to “eligible” students, or to pay for COVID-19 related expenses, including refunds to seniors for spring room and board, sanitizing equipment and costs related to online classes. The college also received $2.6 million in Payroll Protection Plan funding, but that impacted fiscal year 2020, not 2021, Lee wrote.
Spring Hill is Alabama’s oldest institution of higher education and was founded in 1830.
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