The COVID-19 pandemic has put a sudden stall on social and economic activities throughout the world, dramatically changing our lives in just a matter of a few weeks, and increasingly raising concerns about a possible years-long recession. Now entering a month into what is becoming an ever more routine reality of teaching, learning, and working from home, colleges and universities are beginning to transition from the emergent need to preserve health and safety to the urgent need to plan for the financial present and future. While the current economic situation may be more jarring, there are possible lessons to be drawn from the most recent downturn in 2008 to help cushion the blow and prepare institutions for the coming recovery.

As a source of such lessons, we turned to our in-house expert and managing director Catharine Bond Hill, or “Cappy,” an economist by training, who was also president of Vassar College during the 2008 economic downturn. Cappy led Vassar through that tumultuous economic time and for many years thereafter. A development and higher education economist, Cappy provides thought leadership on many issues in higher education, with a focus on increasing attainment for students from diverse backgrounds and helping institutions adapt to changing technological and economic times. We invited Cappy to a virtual chat to discuss her observations in the current moment and offer guiding principles relevant for higher education navigating the challenge and transition. Throughout the conversation, Cappy touched on four themes that seem particularly salient for higher education leaders today, which we summarize below.


1. Plan for the Recovery, Not Just for the Emergency.

Cappy strongly recommends that institutional leaders begin planning for the recovery, not just the urgency of the present. For example, the increasing financial constraints that Cappy faced during the 2008 downturn as president of Vassar College prompted her to support implementing a hiring freeze for faculty and staff and reducing headcount, and at the same time, prioritizing maintaining competitive salaries. While some faculty advocated for across-the-board cuts in compensation to avoid any staffing reductions, the data suggested that staffing had just recently been increased considerably and could be reduced and still be at competitive levels, while reductions in compensation could hurt retention and hiring when the college moved beyond the financial crisis. In addition, the staffing reductions could be accomplished by freezing hiring, not filling vacancies, and not renewing contracts. In this way, Vassar was investing in the faculty and staff the college would need when the recovery came while maintaining control of expenses. These decisions were not painless however; vacancies often did not occur in the right places and not renewing contracts felt much like terminating jobs and affected people who had served the college well.  

Current institutional leaders will face a myriad of similarly complex financial decisions over the next weeks and months. The key to finding success will be threading the needle of spending only what is necessary on precisely what is necessary. The definition of “necessary,” however, should include both what is vital right now and what will be important when times are better, lest the cuts keep institutions from benefiting from the eventual rebound. Of course, what is important will be different for every institution, based on their missions and their students, all of which is framed by their sector within higher education. Cappy suggests presidents remind all of their constituents, internal and external, of the decisions being made in pursuit of their shared mission and values. Financial stability and sustainability are constraints on the mission, but are not the actual mission itself.

2. Rethink Old Models and Figure out Ways to Do More with Less.

Cappy thinks that financial support from the federal government will be essential and helpful in the short-term, but insufficient in sustaining the quality and affordability of institutions in the long term, especially under “old models.” For example, certain segments of higher education, particularly those bigger and selective public and private non-profit institutions, have been competing with each other for talented students, many of whom also come from affluent backgrounds. These same institutions, however, have been under-performing in terms of providing educational access to talented low-income students–a segment of the student body that will grow and whose needs will increase as a result of the pandemic. 

As the needs of the families in the bottom 80 percent of the income distribution will be significantly higher than they were before the current pandemic, the shift toward even greater need-based aid for students will be unavoidable, in which case institutions will need to figure out ways to do more with less resources. Emphasizing the endurance of fundamental frameworks during a crisis, she notes, 

“I think there will be pressure to keep enrollments up, but that will require support for students whose families have gotten hit by the pandemic. … Institutions will need to figure out a way to control their costs and sustain quality while having a more diverse student body, which probably means less net tuition.”

Community colleges are in a slightly different position since they have even less resources to begin with and have little room to try something new. It is also quite possible that we might see an increased demand for community colleges in the coming years if more students choose to stay closer to home. To that end, Cappy suggests the priority for these colleges would be to focus on adopting best practices to improve graduation rates. She adds, 

“We know some things work. The ASAP program at CUNY, for example, works. As we go and think about how the federal government is going to help with community colleges, we want to make sure that resources are transferred to them and that best practices are adopted to improve progression and student success.” 

The focus should be on building the necessary capacities to deliver high quality education at lower cost and sustaining that quality in the long run. This will require colleges to think creatively about how they deliver their courses, regularly monitor progress, and adapt more quickly to the changing times, all the while keeping student-centeredness at the forefront of what they do by using proven techniques and strategies. 

3. Adopt Proven Practices and Collaborate with Others Strategically.

There are numerous resources–and collective knowledge based on years of research and experimentation–that can be tapped into to address current challenges around student access and success, putting the field ahead of where it was in 2008. Several higher education associations, including CCSSE and AAC&U, have put forth sets of proven practices that can lead to improved outcomes for students, if implemented correctly. Barriers to student success still exist and they require strategic internal alignment and structural changes to remove. However, Cappy predicts that this moment of upheaval could provide a bit more flexibility and buy-in for strategic change from constituencies that were more committed to the status quo during routine times. 

In addition, it is important to remember that institutions are not alone in this crisis; strategic collaborations can help navigate immediate challenges and better prepare for the future. There are already many existing official networks available that institutions are part of to collaboratively tackle the pressing problems they face. From sharing resources to taking a collective action to advocate for government policy to better serve vulnerable student populations who will be most affected by the pandemic-induced economic downturn, these kinds of networked collaborations can prove to be especially effective in these difficult times.

4. Focus on Expanding Educational Access and Success. 

Lower economic activity has always led to increased demand for education of a variety of sorts, as in past recessions, and similar trends may recur this time around, though more families perhaps will be cash-strapped than before if their detachment from the labor force continues for a while. Cappy recommends that institutions also focus on expanding educational access to a broader student body, including adult learners, noting, 

“We have this big pool of adult learners, many of whom don’t have a bachelor’s degree, but some college, and we need to bend over backwards to figure out how to help them. If they are unemployed or underemployed, I’d like to see institutions across all sectors go after this group. [These students] may not be their main line of business, but if [institutions] consider them as part of their obligations in serving the public good, [they can] figure out a way to help.” 

Although some institutions may have already been effectively serving adult learners, in the long run it seems imperative that the larger field of higher education provides a variety of types of education to help them quickly move ahead when the economy begins to open later. 

Cappy hopes to see more federal support going in to help students of different types and backgrounds get the education and training they need, but notes that the kind of education they get will be an important issue going forward. Despite a grim labor market outlook in the last recession, individuals with a bachelor’s degree fared much better than those with just a high school diploma, both in terms of employment and earnings. Cappy expects that a bachelor’s degree will continue to have value when the economy recovers, making it all the more important to encourage and support students to go to schools where they will be served well and succeed. Institutions that have a strong record of successfully graduating and placing students into high-growth jobs should be well positioned to lead.

Ithaka S+R is tracking developments and implications of COVID-19 for colleges and universities in an attempt to assist the broader higher education community as it navigates the crisis. Please check out our resources page and reach out to us with any thoughts or questions.