BRUNSWICK — Bowdoin College has already lost millions of dollars since canceling in-person classes in March, and the losses are expected to multiply well into next year.
Bowdoin officials said last month that by the end of June the college will have lost “well over” $8 million, but college president Clayton Rose announced Friday that next year the college could lose an additional $20 million or more — the largest shortfall in its history.
“As a result, we will almost certainly need to cut costs by more than what was done in 2009–2011,” Rose said, “and even these measures will not eliminate what will likely be a substantial deficit.”
In the years following the 2008 recession, Bowdoin faced a $9 million loss, equal to 7% of the college’s revenue at the time, Rose said.
Officials instituted a two-year freeze on faculty and staff wages for those making more than $40,000 per year, a two-year freeze on operating expenses and a hiring freeze. The measures kept the actual losses much lower, at around $3 million.
The projected losses are based on enrollment, tuition and financial aid figures, spokesperson Doug Cook said Monday, noting that overall enrollment estimates are still being calculated.
Decisions about potential spending cuts will not be made until officials decide whether the fall semester will be on campus or students will still be learning remotely.
Bowdoin officials instituted a hiring freeze last month and revised departmental budgets to limit expenditures. Changes to the budget will make for some difficult choices, but Rose is primarily concerned with preserving jobs and “maintaining the excellence of Bowdoin’s programs.”
The losses for this year, an expected $8 million by the end of June, account for about 5% of the college’s $175.8 million operating budget, and spokesperson Doug Cook said that number is expected to grow.
The primary hit to the college’s 2019-20 finances comes from the switch to remote learning, room and board refunds paid to students and assistance for low-income students with COVID-19 related expenses, Cook said last month. The college did not make any adjustments to tuition payments.
To help cushion the blow, Bowdoin was allocated $1.12 million through the Coronavirus Aid, Relief and Economic Security (CARES) Act passed by Congress. The act provided nearly $14 billion for higher education.
According to the Portland Press Herald, Maine schools received about $41 million in aid.
Colby College and Bates College, both comparable in size to Bowdoin, received $1.24 million and $953,516 respectively, while the University of Maine System received $17.2 million spread across its seven universities.
Under the rules, half of the funds, about $562,000 must go toward low-income students and the other half can be used to help defray the costs incurred with the transition to remote-learning.
Cook said Monday that Bowdoin officials still have not decided whether to accept either portion of the funds.
Bowdoin College has a $1.74 billion endowment, but according to Cook, a strong endowment does not equate to a strong cash flow.
“It is not one big pot of money or a savings account,” he said.
“The endowment is permanent, donor-restricted capital that provides a steady stream of funds in support of Bowdoin’s current mission,” he said.
The school’s endowment is made up of about 1,700 different funds, about half of which can only be used for student aid.
“So, it’s not something we can dip into any time we want,” he said.
The endowment is the college’s second-largest source of revenue and, like other accounts, is expected to see “significant losses” by the end of the year. Officials won’t know the extent of those losses until late this summer, Cook said.
Other impacts of the pandemic are likely to be seen later.
“Every college and university in this country is contending with exactly the same issues that we face,” Rose said. “Notwithstanding the seriousness of the global health crisis and related economic distress, and the difficult decisions and painful periods ahead, we are fortunate and as well-positioned as any school to weather the challenges.”
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