College Campuses and Towns Have No Good Choices

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College life this fall is going to be a potential source of trouble -- both on campus and for the towns where colleges are located. Meeting friends, dorm life, socializing and attending classes are among the highest-risk activities in terms of spreading Covid-19 because they involve prolonged indoor personal contact. A study from South Korea shows that young people in their late teens and early 20s spread the virus faster than people of other ages.

The most responsible thing universities could do in terms of protecting public health would be to close dorms, hold classes online and bar all in-person student social activities for the fall semester. On their own, young people are unlikely to be safe and responsible; even if classes enforce strict social distancing and masking requirements, parties and dorm rooms will become breeding grounds for the virus. Young people don’t often die of the disease, but they can suffer long-term respiratory, neurological and other effects. They can also infect more vulnerable populations such as professors, administrators, family members and other community members.

Unfortunately, many colleges are refusing to shut down in-person student life. The reason is probably financial. Coronavirus has hit university budgets hard -- keeping out high-paying foreign students, reducing state education funding and making students wary of attending. Fear of losing additional revenue from dormitory fees appears to be overriding public health concerns for many institutions of higher learning -- just one more way in which a concern for money over health has degraded the U.S.’s pandemic response.

Some will be responsible about holding classes online, at least some of the time. But some are insisting that classes be held in person. Colleges can charge full tuition for a semester of online learning, but students and their parents tend to dislike online classes, so some may simply decide to skip it. In addition, U.S. Immigrations and Customs Enforcement has said it will bar international students from entering the U.S. if their classes would be held entirely online.

And if some students find that a combination of distance learning and internet-enabled socializing is just as good as the traditional college life, it could spark a longer-term shift away from college campuses as an institution. If young people realize that they can get almost as good an educational experience with “Zoom university,” and satisfying personal growth and career networking experience via various social apps, they might start to question the need to pay hundreds of thousands of dollars for the high-end package of university life. Even before the pandemic, many Americans were beginning to question whether astronomical tuition was worth it; letting students get a taste of life without the full college experience might turn that trickle into a long-term flood.

So many colleges are likely to risk coronavirus outbreaks in order to save their pocketbooks. But ironically, they may end up getting the worst of both worlds. Just as premature reopenings of bars, stores and restaurants ended up causing big Covid outbreaks and hurting business activity in many Sun Belt states, virus outbreaks on campuses could cause a stampede away from universities eroding trust in universities as responsible stewards of young people’s health and safety. And at the same time, enough classes are online, and enough students are staying home, that a long-term shift toward distance education is unlikely to be staved off simply by having kids on campus in the fall.

So one way or another, a big hit to university tuition is coming -- on top of the big hits from state budget cuts and the decline in foreign students. That triple whammy will end up closing many colleges that are barely profitable -- a trend that began before the pandemic -- and will force many others to cut salaries and services.

All of this also means big trouble for  college towns, which serve as economic engines for many areas that otherwise would be in decline A research university increases the economy of the surrounding area by drawing in skilled workers, which in turn draws in private investment. Even colleges that don’t do much research generate significant amounts of economic activity simply from student and staff spending in the region. Public universities in small towns also redistribute wealth from the big cities via the tax system. As things stand, college towns tend to have higher wages and higher gross domestic product per capita than other places.

With some students staying home and universities themselves under both short-term and long-term financial pressure, all that is now at even greater risk. With stores, restaurants, bars and other businesses quiet or empty, college towns could face a very strange and difficult autumn. And many of those troubles may last long after the pandemic is gone. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

©2020 Bloomberg L.P.

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