— This is the script of CNBC's news report for China's CCTV on July 8, 2020, Wednesday.
In fact, even before the outbreak of the epidemic, some colleges and universities were facing financial pressure due to the continuous cuts in higher education funding in the US states. It can be said that the epidemic has further increased the financial burden on colleges and universities.
A survey of graduating American high school students found that 52 percent students' parent or guardian had lost a job or been furloughed; 27% of students said they could no longer afford to attend their favorite school.
As a result, many schools are bracing for a year-on-year drop in student income for the new school year. In the US, many schools rely heavily on alumni donations, which have also fallen sharply during the recession. Earlier this year, MacMurray College, which has a 174-year-old history that based in Illinois closed because of financial stress.
Faced with the severe challenge posed by the epidemic, many universities have tried to cut costs. The Art Institute of San Francisco cut some degree programs, the University of Chicago announced pay freezes and hiring slowdowns.
The principal said in May that revenue for the school year would fall by $220 million. Other schools plan to lower tuition fees in an effort to gain more students. Princeton University has decided to offer a 10 percent tuition discount to all undergraduates in the new academic year, whether they attend classes on campus or attend online.
In this case, for international students, the impact may be two-sided. On the one hand, scholarship programs may be squeezed, and the epidemic has created some additional barriers to application. For example, many offline exams have been canceled. In addition, the epidemic situation and economic development in study-abroad countries, including the latest visa policy adjustment in the United States, are risk factors. On the other hand, students who have a strong desire to study abroad and can afford high tuition fees may benefit from it.
First of all, colleges and universities have always favored self-funded students. This year, many American and international students have dropped out for a variety of reasons, which may also make them less competitive. For example, there are business schools that allow students to apply first then submit their GMAT. It is reported that some universities including the University of Birmingham in the UK even accept China's CET-6.
Moody's notes that Chinese students make up 23 percent of the world's international student, and for many struggling schools, acquiring this pool of students is critical. For colleges and universities, the timely start of the school is also a key factor to determine whether the financial impact is controllable. In the U.S., the question is clearly one of great uncertainty. We will keep an eye on this issue.