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College Fails

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About a month ago, Shreya Patel got a letter from the business school at Rutgers University in New Jersey. She's a senior there, studies supply chain management.

SHREYA PATEL: They sent out an email announcing that everything is going to be remote. But that email really did not include anything about tuition - if it would be going down or anything like that.

ARONCZYK: She reads the email again. She figures they must mention it somewhere.

PATEL: They didn't even address that in the email at all. It was just kind of hidden, like, in the FAQs.

ARONCZYK: So she reads the FAQs, and she's like, wait; my department is going totally remote this fall. Shouldn't that mean I get reimbursed for all the real-life stuff that I'm not going to use?

PATEL: And the answer was no.

ARONCZYK: Shreya, like the dogged supply chain management enthusiast that she is, breaks down her school bill into its elements. She looks at what services she's supposed to get, who's delivering what and how much each item costs.

PATEL: OK, so it is $171 for computer fees, $139 for a school fee, $6,300 for tuition and then 1,347 for a campus fee, so for a total of 7,957.

ARONCZYK: OK, and that sounds to me like that's just one semester.

PATEL: Yeah, that's one semester, yeah.

ARONCZYK: Shreya's thinking, more than $1,300 for a campus fee - I might not even see campus this year, let alone go to the student center for my Supply Chain Association club meetings, which, by the way, is a real thing that she goes to. So why are we paying for this?

PATEL: We shouldn't have to be, you know, paying all these things when you're just getting an online education.

ARONCZYK: That very afternoon she received the email, she goes online, starts a petition.

How many people did you think would sign your petition?

PATEL: I thought maybe, like, in the low thousands.

ARONCZYK: Shreya shares it with her friends and her classmates. She puts it up on Facebook. The local TV news picks it up. And Shreya becomes a young woman with a mission to lower tuition with her petition.

PATEL: Yeah, I know. It's a tongue twister.

ARONCZYK: Lots of Rutgers students sign it. Within four days, she got more than 25,000 signatures.

PATEL: Yeah, that's actually crazy. I definitely did not expect that many people to sign it.

ARONCZYK: That is 25,000 people saying - you know what? - this fall, college is not what I want it to be, so why should I pay full price?


ARONCZYK: Hello, and welcome to PLANET MONEY. I'm Amanda Aronczyk. Colleges are in crisis. There are around 20 million college students in the U.S., and most of them have no idea what their fall is going to look like. Right now, colleges are making these brutal financial decisions, and that's having ricocheting effects, hitting students, staff, even entire towns. Today on the show, heading off to college in a pandemic.


ARONCZYK: Shreya Patel's petition makes total sense from her perspective. Like, why would you pay for things that you're not getting? But like in the larger economy, paying less means less income for somebody else. And the costs of that adjustment can be painful. For Rutgers, the university is weighing trade-offs between the demands of students and staff and the unions and their accountants. Those trade-offs look very different depending on what side of the quad you're standing on. Now, this is a really big public university. There are more than 70,000 students there, and the pandemic is making the university scrutinize each and every trade-off, every layoff, every cut.

And so there have been a lot of petitions, protests, even some lawsuits against the administration. And with that in mind, back in June, I got in touch with this young woman. Her name is Luz Sandoval, and she's kind of found herself in the middle of this mess. She's doing her master's degree at Rutgers.

LUZ SANDOVAL: I'm studying epidemiology. The idea was to study infectious diseases. The dream was to work one day with Doctors Without Borders.

ARONCZYK: But now instead, she's getting to experience a real, live pandemic without having to travel abroad. I know; it's a very dark silver lining.

How big a role does Rutgers play in your family's life?

SANDOVAL: I would say it's everything.

ARONCZYK: Luz did her undergraduate degree at Rutgers. Her sister did her undergraduate degree at Rutgers. Her brother is planning to transfer there in a year. Even her 10-year-old brother has a Rutgers sweatshirt in his future.

SANDOVAL: My little brother always said that he's going to go to Rutgers to be a dentist.

ARONCZYK: You know already?

SANDOVAL: Yeah, since he was 4 he's known.

ARONCZYK: All of these degrees and the plans for the future have been made possible by their mother and her job in the dining hall. I did get to speak with Luz's mom, but she was a little cautious about how much she said. She did tell me, though, that she likes her job a lot. She makes pizza in the dining hall. And if you have forgotten, pizza is like oxygen for college students.

It's a ton of students every day coming in to eat.

UNIDENTIFIED PERSON #1: A lot of students, yeah.

ARONCZYK: Is it loud and crazy?

UNIDENTIFIED PERSON #1: Yes. Yes, it is.

ARONCZYK: What's everybody's favorite food?


ARONCZYK: So is your station the busiest station?


ARONCZYK: Luz's mom makes $18 an hour, which is not a lot for a family of six, but the benefits have made it worth it. The job gives her kids a break on their tuition, which is often one of the great things about working for a school. And it's been a really good and secure job for her. That is, up until this spring, when her dining hall was closed and she received a letter saying that her contract was up. Now, she gets a letter like this every year. She's on a 10-month contract, but she always gets her job back in the fall, and she's been able to keep her benefits.

Do you have the physical letter here?

SANDOVAL: Do you have la letra (ph)?

UNIDENTIFIED PERSON #1: Yeah, yeah, yeah, yeah.

ARONCZYK: The way the letter was worded it wasn't clear if this was a temporary or a permanent layoff. The dining hall lost a lot of money in the spring, and chances are they're going to lose even more in the fall.


UNIDENTIFIED PERSON #2: Are we live now?



ARONCZYK: Luz's mom is part of a union at Rutgers. And in June, the school's unions held this joint press conference to try to draw attention to a bunch of layoffs.


UNIDENTIFIED PERSON #2: Without any further ado, Luz Sandoval.

SANDOVAL: Hi, everyone.

ARONCZYK: Luz was invited by the unions to talk about her mother's situation.


SANDOVAL: I knew I wanted to go to Rutgers. This was the greatest opportunity I could've gotten, and it was wonderful. Because of tuition remission, I was able to finish my degree in four years. And so, you know, when we found out that my mother was laid off, we - there was, like, actual fear in the family. Like, we don't know - sorry, I'm emotional. We don't know what's going to happen.

ARONCZYK: Luz and her family have been part of Rutgers for years. And when their school makes decisions that seem to prioritize the business over everything else...


SANDOVAL: It absolutely feels like betrayal.

ROBERT KELCHEN: Rutgers is in a tough spot managing their finances.

ARONCZYK: This is Robert Kelchen. He teaches at Seton Hall University in New Jersey, not too far from Rutgers.

KELCHEN: They don't have as much flexibility as many colleges. Most of their employees are part of a union, and that makes it difficult to lay people off or to change how much money people make.

ARONCZYK: Robert is an associate professor of higher education.

KELCHEN: I study and live higher ed finance.

ARONCZYK: You study and you live higher ed finance. What does that mean?

KELCHEN: Yeah, I'm also department chair.

ARONCZYK: Oh, you're in the weeds.

KELCHEN: Yeah, I'm deep in the weeds of all this, trying to get everything ready for fall. And fall's getting close.

ARONCZYK: Fall is getting close, and how college finances are being hit by the pandemic is key to understanding what Rutgers and the unions and Luz's mom are all facing right now. Robert says colleges have four main sources of funding. There's tuition, state dollars, endowments and donations and, finally, there's what Robert calls auxiliary revenues, which means dorms and meal plans and the money that sports teams make. And all of those things are taking a hit. But it's the things that require real, live students on campus that are particularly uncertain right now.

KELCHEN: The thing that's terrifying me at the moment is we're roughly a month out from the start of the fall semester as we talk, and most colleges still haven't committed to firm plans about what the fall will look like.

ARONCZYK: As of the end of July, one tracker lists that about a third of colleges have announced that they're going primarily online. And that is changing every day because there's no one single college apocalypse story. Colleges themselves are pretty different from each other, but there are patterns.

KELCHEN: Community colleges have gone online fairly quickly because they're tied to local communities. They're not worried about having enough students to enroll. They're an inexpensive option that's good for students when they need flexibility. Historically Black colleges have also been likely to go online because of the way the virus has affected the African American community.

ARONCZYK: And schools like Harvard have announced they're going fully online, too, because they can. Students aren't going to drop out of Harvard just because they have to sit in Zoom calls all day. That means about two-thirds of colleges are promising their students an in-person experience or some kind of hybrid model. They want students to commit to showing up this fall.

KELCHEN: Students want an in-person experience even if they don't fully realize what the in-person experience will actually be this fall.

ARONCZYK: What will the in-person experience be this fall?

KELCHEN: Being on campus will be something like living in a monastery or a minimum-security prison.

ARONCZYK: Monks, they don't get out much.

KELCHEN: In-person interactions are going to be severely limited. Students living on campus are basically going to go to class every once in a while, go pick up food from a dining hall and then do almost everything back in their dorm room. And if you try to go out and party, you'll be scorned.

ARONCZYK: And the reason it'll be like a minimum-security prison is because students will be constantly monitored and tracked. So what Robert says is happening is colleges are telling students, also known as prospective buyers, that, yes, school will be in person, at least a little. And they're going to keep that line long enough for students to mail in a check, hoping that the students don't pick another school or defer or drop out.

KELCHEN: There are going to be a lot of really upset students and families in a couple of weeks when more colleges say, oh, sorry, we have to go online for the fall, even though they were telling students for months that they would be in person.

ARONCZYK: And that's what's going to happen.

KELCHEN: I have a hard time seeing a way around it for most colleges. College campuses are almost like cruise ships in terms of density and putting people together.

ARONCZYK: They're both fun. There's lots of organized activities, maybe a few regrettable decisions. But they are also petri dishes of humanity and, for some cautious students and their families, kind of a tough sell right now. So with maybe lower enrollment and less auxiliary revenues - that's the dorms, football tickets and pizza - colleges say that they can't cut tuition fees.

Now, the students and unions have a counterargument. What about the endowments? Aren't these meant to be rainy day funds? Aren't we soaking wet from an extremely rainy day?

KELCHEN: People think of college endowments, they think of Scrooge McDuck bathing in a pile of gold coins. And the reality is that there are a bunch of little separate bank accounts for particular purposes, where those gold coins are divided under lock and key. And maybe 20% or 30% of an endowment is actually what's called unrestricted...


KELCHEN: ...That colleges can use for whatever they want.

ARONCZYK: If tomorrow, Harvard liquidated their endowment, sure, they could give each of their students $1.6 million. But most students don't go to elite schools with gigantic endowments. If Rutgers did the same thing, each student would get $24,000 - basically a waterfront house on Cape Cod versus a Chevrolet Malibu, maybe fully loaded. And then those colleges - they would've spent all of their savings.

KELCHEN: But they don't want to spend that all at once because they want it to grow in the future. And they also don't know how long this crisis will last. And they don't want to spend their entire nest egg right now if things aren't back to normal for another year or two.

ARONCZYK: Another year or two. And that, sadly, could be the reality for all of us. After the break, we head back to Rutgers.

Rutgers did not want to do an interview with us, but I did check in with them a few times about our story, and they gave me an update. The college got a new president as of July 1. Poor guy really walked into the fire, but he does earn a lot. Anyway, he almost immediately sent out an email notifying students of a 15% reduction on their campus fees. So I called up Shreya Patel, the student with the tuition petition, to see what she thought of that.

PATEL: They cut 15% off of the campus fees, so not 15% of the tuition - just the fees - like, ends up being equivalent to about less than $300, basically. They said it like they, you know, they want to help us out, but I don't really think $300 - less than $300 really is much help. It's not really what we were aiming for.

ARONCZYK: You wanted the whole thing gone?

PATEL: Yeah, or at least 50%.

ARONCZYK: Did you have a little bit of like, OK, thank you for trying, Rutgers? Like, I appreciate that you guys made an effort?

PATEL: Yeah. I mean, yeah, it's - I liked the fact that they - you know, at least something happened because that means they saw the petition, they saw all those students, you know, kind of demanding this action. It's just - I just think it's still a little, you know, off-putting and maybe a little embarrassing that it's just that low of a number.

ARONCZYK: Shreya has updated her petition, and she is still pressuring the school for a greater reduction.

And I also gave Luz, the public health student, a call to check up on her and her family.

How is your mother doing?

SANDOVAL: Well, she - I think she has dwindled hope. Things are not looking well.

ARONCZYK: It seems that some people in her union did get their jobs back, but she and the other dining hall workers have not. It looks like the school is going to have way less students on campus than usual.

SANDOVAL: They anticipate that they're probably not going to open all four cafeterias. And even if they do open a few of the cafeterias, there's going to be significantly less, like, work to be done because they need to social distance.

ARONCZYK: One possibility - Luz says she heard her mother talking with a friend about trying to start a landscaping business.

SANDOVAL: My mother is a hard worker. She'll do anything. But I do know she'd rather be at Rutgers.

ARONCZYK: Luz also did have some good news. She got a job.

SANDOVAL: I'm actually starting tomorrow - my first day - and the hourly pay is $25.

ARONCZYK: Luz has been hired as a contact tracer for the state of New Jersey, and her salary is being paid for by - wait for it - Rutgers. It's a 6-month position in partnership with the state. And she can keep doing the job through the fall semester while she works towards her master's degree. Now the family's financial calculations are very different since Luz got this well-paying job. And she can see the value of her college degree in this very real way.

SANDOVAL: If I get my degree faster, I could get into the workforce. They're looking for epidemiologists right now. And then I could get a decent-enough-paying job. I mean, like, I am doing - a contact tracer right now, and it's the highest-earning job I think any member of my family has ever had.

ARONCZYK: And whether college is online or in person this fall, Luz just wants to get her degree and graduate.


ARONCZYK: Full disclosure - my sister works at Rutgers. She's a professor there. And in most years, I guest teach there for about a half a day.


ARONCZYK: The new GDP numbers are out, and they are terrible, although maybe not quite as terrible as the numbers you see in the news. If you want to find out more, go listen to The Indicator.


ARONCZYK: We love to get your emails - We're also on Facebook and Instagram and Twitter and TikTok, all @planetmoney.

Today's show was produced by Darian Woods and Alexi Horowitz-Ghazi. Alex Goldmark is our supervising producer, and Bryant Urstadt edits the show. I'm Amanda Aronczyk. This is NPR. Thanks for listening.


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