IMPACT OF CORONAVIRUS ON CASH FLOWS IN UNIVERSITY BUDGETS: EXPLORATORY STUDY

Klaus S. Beckmann
Srinivasan Ragothaman
University of South Dakota

ABSTRACT

There are dire predictions for future enrollments in 4-year colleges due to Coronavirus.
According to Lapovsky (2020), undergraduate enrollments may decline 15 to 40 percent.
Therefore, undergraduate revenue declines could be as much as 20 percent and more for
individual universities. Students may be reluctant to choose expensive name-brand schools that
have moved to online (remote) instruction. Instead, students and parents may choose schools that
are in-state or closer to home (Poliakoff, 2020). International student enrollments are also
expected to decline due to travel restrictions. These difficulties are likely to cause cash flow
challenges for many universities around the country. This study provides key insights as to the
cash flow problems faced by university leaders and highlights cash flow management
opportunities that can provide some relief to colleges. Cash flow issues are synthesized under (1)
Activities that cause cash inflow increases (short term and long term) and (2) Activities that cause
cash inflow decreases (short term and long term). General cash inflow decreases, and cash
outflow increases are also briefly discussed.

Keywords: COVID-19, Coronavirus, university budgets, cash flows, student enrollments, short term, long term