The Financial Aftermath of COVID-19 at SLU

The spread of COVID-19 brought both social and financial turmoil to many aspects of everyday life. The phrase “the new normal” is both heard and seen everywhere, but there are also shifts going unnoticed—businesses attempt to navigate uncertainty while remaining dedicated to their missions. Needless to say, colleges, especially private ones, took a major hit. 

In May, SLU released information on how the administration would be handling the potentially devastating financial blow of the virus, and what measures would be taken to ensure job security for faculty and staff. However, with the semester remaining in-person and all appearing to be going as planned, many have the question: how has that changed SLU’s financial prospects? Has the situation become less dire? The University News reached out to David Heimburger, the university’s vice president and CFO, to obtain concise data.

The CFO began by addressing the intentions of the university, and ensuring that “the University bases its budget priorities every year on SLU’s mission. This year, our top priority was to do everything possible to avoid staff terminations due to the costs we have endured because of COVID. We’re very mindful that staff layoffs can often disproportionately impact BIPOC communities.”  

In May, when the virus’s longevity became clear, SLU outlined cost-reduction measures to manage an anticipated budget deficit. When asked if he anticipated any further rollbacks of the cost-cutting measures announced last May, Heimburger referred back to the statement of SLU’s president, saying, “As Dr. Pestello indicated, we plan to re-evaluate in January. We recognize that employees are making great sacrifices this year, and we’re committed to restoring benefit cuts and salary increases as soon as our finances allow. But acting prematurely could result in the staffing reductions we’re so committed to preventing.”  

He also took the opportunity to share how SLU is handling the situation compared to other universities. He reflected on the fact that we have made less of a faculty sacrifice than other institutions, but most of the financial sacrifice was in line with other colleges of the same size and status. When it comes to federal aid, the CFO said that SLU “could have laid off staff in early summer, and federal monies would have paid their unemployment for several months. But it wouldn’t have been right. That’s not who we are. So we kept our academic and operational staff whole. It was the right thing to do.”

However, as we now know, COVID-19 is expected to be with us into SLU’s next fiscal year. It would be normal to worry about further cost-reduction measures, however, when asked if any additional cutbacks are anticipated, Heimburger said, “No, we don’t. But that is entirely dependent on SLU’s ability to remain open. We can’t let our guard down. Our success, so far, is due to one factor: our students. As difficult and abnormal as this semester has been for them, our students have stepped up and abided by the restrictions we have put in place.” 

While many students voiced concerns early in the year that the university would be quick to lay complete blame of an outbreak on the students, Heimburger made a point to commend the student body for how the semester has gone, saying that “our students are the reason we have made it half-way through our fall semester with low rates of infection and few clusters.” He also added that while some students are not being compliant to the rules, “the vast majority of our students recognize that by wearing a face mask and by being socially distant, they are protecting one another as well as our essential staff who are at risk of COVID complications were they to be infected.”

The numbers tell the true story of how SLU stands financially. A major concern for colleges this year was the potential for enrollment decrease. The big question colleges across the country have been asking is how their enrollment will be hit by virus concerns, because lower enrollment means less money to allocate to departments and employee salaries. When asked if SLU’s enrollment was higher than budgeted, the CFO said that “we enrolled around 1,540 first-year students this fall. This is a slightly smaller decline than we had anticipated because of COVID. We won’t know the financial impact of this fall’s total enrollment until we’ve finalized the amount of scholarships and aid that we will provide this year. We had allocated more than $196 million in institutional aid for students to reduce the cost of their attendance.” 

Though the enrollment numbers were better than expected, the other revenue source that had to be taken into account was that of student housing. So, this begs the question, how was SLU’s housing affected? Heimburger said, “This fall, it was necessary to take actions that would enable us to welcome residential students back to campus.”

Among these precautions, SLU reduced the housing capacity by more than 10 percent, ensuring that no more than 2 students shared a room, and campus apartments are in-use as quarantine and isolation housing. There was an expected loss of revenue in housing, however, “the decline is likely to be more than what we had projected. But again, housing revenue is very dependent on our ability to remain open until Thanksgiving break. Recall, SLU refunded $10 million in room and board fees to our students after we closed our campus in March. None of us wants to go through that again,” he said. 

Many question the input the SLU community has on decisions made by administration, but according to Heimburger, “The process is open and collaborative. Representatives from SGA, Faculty Senate and the Staff Advisory Committee are members of the University Leadership Council, as are the deans. All major budget discussions took place with ULC, and we encouraged everyone to bring forward the concerns of their stakeholders — and potential solutions. That feedback was incredibly valuable to the process.”

Rest assured that this will not be the last information about SLU’s financial status heard from the administrators this year on, as Heimburger confirms that Dr. Pestello and Interim Provost Dr. Michael Lewis are hosting virtual town hall meetings with each of the colleges at SLU, and vice presidents will be sharing details throughout the school year. 

“I expect there will be more updates to the entire SLU community as we get a clearer picture of this year’s budget,” Heimburger said.