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Burwell projects up to $100 million loss for 2021 fiscal year from pandemic

In weekly message to AU community, Burwell outlines possible adjustments to handle the deficit

The University is conservatively projecting a potential shortfall of $100 million in lost revenue and increased costs for fiscal year 2021 as a result of the coronavirus pandemic, President Sylvia Burwell wrote in an email to the AU community on Tuesday.

The estimate is a significant increase from the initial $27 million projected loss, which necessitated major adjustments, including a hiring freeze, a pause on new construction, reduced compensation for the president’s cabinet, and a halt on merit increases for faculty and staff earning more than $40,000 a year. 

“While the scenarios present a range of possible impacts, we cannot assume the more optimistic potential outcomes will materialize,” Burwell wrote.

The approximate budget for fiscal year 2021 is $775 million, so a loss of $100 million is 13 percent of the budget. Burwell said that because 92 percent of the revenue comes from tuition and fees, the financial impacts will put pressure on all aspects of operations. This is compounded by the chance of a decrease in enrollment and housing occupancy. 

The impact of this loss will be long-term, Burwell wrote, with projections indicating a two-year effect on University operations and budget. AU will ask individual schools to pursue their own non-personnel cost-saving strategies, but the University is also considering options that include stopping employer matching for retirement contributions, salary reductions, furloughs and possible layoffs. 

In April, The Eagle reported that food service workers were struggling after 180 personnel were furloughed when the University transitioned to online classes. 

Plans for the fall will be announced by mid-June, Burwell announced in May. Three task forces — Health and Safety, Enrollment and Retention, and Workforce Retention — along with faculty and administration, are working on a comprehensive plan, Burwell wrote in Tuesday’s announcement.

“All the task forces are interconnected and collaborating closely together, as every decision has multiple implications across the institution,” Burwell wrote. “This will ensure that our operations and procedures are aligned and have the flexibility to adapt to the changing conditions of COVID-19.”

For a possible return on campus, Burwell wrote that the task forces are preparing testing protocols, social and physical distancing guidelines, occupancy requirements for housing and classrooms, and cleaning and safety measures in addition to supporting faculty and staff who are considered high-risk.

This is a developing story and will be updated with new information as it becomes available.,

As the semester comes to an end and one of the founding members leaves American University, Section 202 has decided to take a trip down memory lane. For our fans, old and new, who are wondering how Section 202 came to be, this episode is a must. Listen along as hosts Connor Sturniolo and Liah Argiropoulos reminisce about the beginning of Section 202 and how it got to where it is now.

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