Cornell estimates its COVID-19 financial losses could exceed $200 million by end of next fiscal year

ITHACA, N.Y. — Cornell University is estimating a potential loss for its Ithaca and Cornell Tech campuses of between $160 million and $210 million by the end of the next fiscal year as it deals with the coronavirus pandemic’s financial fallout.

The university also expects a “potential longer-term” impact of about $40 million per year for at least two more years.

That’s according to a Wednesday statement from Cornell University President Martha Pollack about the school’s planning for the pandemic’s consequences.

Besides the steps Cornell has already taken, Pollack says furloughs or layoffs are possible “to cover our additional, previously unanticipated expenses and those that may follow.” Top Cornell officials “will provide more details of our financial situation later this week,” Pollack wrote.

Cornell had previously announced a freeze on hiring; the elimination of annual salary increases for faculty and staff; voluntary salary reductions by senior administrators and some faculty and staff; a pause in capital construction projects; and a repurposing of unit reserves. Each of these steps has helped to “mitigate the budget impact for the short term.”

Cornell and colleges across the nation have been hit hard by the financial implications of social-distancing measures taken to reduce the spread of the coronavirus. On-campus instruction has ended, residence halls and dining rooms have been emptied, graduation ceremonies have been postponed, and fundraising events have been curtailed. Also, the stock market selloff has hurt universities’ endowment portfolios. Furthermore, prospective students’ family finances have been damaged and on-campus visits have been scrubbed, making it challenging for colleges to fill out their incoming freshman and graduate-school classes for the fall.

Financial aid impact

Of Cornell’s estimated dollar loss amount, the largest portion is an anticipated additional $145 million that will be needed to meet the increased financial-aid needs of Cornell students.

While these numbers factor in the $18 million in prorated rebates Cornell issued to students for their spring housing and dining costs, they assume that the university will be able to “fully open” in the fall.

“If that is not possible, we are looking at hundreds of millions in additional impact,” Pollack wrote.

At Weill Cornell Medicine, the school has already seen a loss of close to $200 million, mainly from a decline in clinical revenue as most services except for the treatment of COVID-19 have temporarily ceased.

Academic and operational planning

Cornell needs “to develop and assess a range of options for reactivating our teaching, research and university operations,” Pollack wrote.

She has established four planning committees that include faculty, students, and staff to develop recommendations for “reactivating the university and for saving resources.” The committees will focus on teaching-reactivation options; preparation for online teaching; research and operations reactivation; and an administrative functional review initiative.

The administrative functional review initiative involves deans and vice presidents across the Ithaca and Cornell Tech campuses [looking] for ways to meet Cornell’s projected budget challenges by identifying both structural and one-time savings that are possible across the university.

All of the committees will begin work immediately. The Committee on Research and Operations Reactivation is expected to complete its work by May 15. The other committees will present their recommendations between June 15 and June 30, per Pollack.