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Students are considering dropping out of college because of coronavirus

CNBC logo CNBC 4/29/2020 Abigail Hess
© Kevork Djansezian / Getty  

Colleges around the world have closed their doors and moved their classes online to stem the spread of coronavirus. 

An overwhelming majority of students agree with public health officials that canceling in-person classes is an important part of social distancing and containing the virus, but that doesn't mean they are prepared to invest the same amount of time and money on a different educational experience. 

Because the nature of their education has so drastically changed, some students are suing their universities and asking for their money back, claiming that students have paid for services they're no longer receiving, such as face-to-face interaction with professors, access to campus facilities and hands-on learning, as well as mandatory fees for activities, athletics and wellness programs that they will not be able to participate in. 

Other students are deciding if it is financially prudent to temporarily, or permanently, drop out. 

"I know there've been some students that have already withdrawn from next year because they're worried about not getting the same type of on-campus experience that they wanted," Jeremy Alder founder and managing editor of College Consensus tells CNBC Make It. "And I imagine there'll [be] a lot more students deferring college to take a gap year, which is not a bad idea in any year, but I think this could definitely tip the scale for students who are trying to decide."

Early signs that college enrollment will dip significantly next semester have raised concerns among the thousands of small and medium-sized colleges that rely on student tuition to remain open, rather than drawing from multi-million dollar endowments. 

"I think colleges have to expect they're going to see a drop in attendance both because students are going to get worried about not getting the experience they wanted and also because their financial situations are going to be a lot different than they anticipated and so that's going to limit some students' abilities to pay for college," says Alder.

CNBC Make It spoke with students who are making these difficult decisions:

An educational timeline disrupted

Gabrielle Alias, 22, is a senior at Babson College, an entrepreneurship-focused school where all graduates receive a bachelor of science in business. Alias had completed all of her graduation requirements before the spring semester started and is set to graduate in May, so rather than take a final semester online she chose to withdraw from her last few classes. 

"It just didn't make sense to continue. I could get tuition back, it was easy to withdraw and they were being very respectful, so I just withdrew from my classes," she tells CNBC Make It. "I've been focusing on myself and on my finances."

Now Alias is living with her mom in San Francisco and delivering food for Caviar part-time. She has an internship with a music publishing group in London that was delayed from June to October. 

While Alias is far from being a college dropout, her situation reflects the kind of limbo that many students are considering — either to delay graduating, delay starting college or simply take some time off from their studies. 

a person posing for the camera: Gabrielle Alias delivers food part-time for Caviar. © Provided by CNBC Gabrielle Alias delivers food part-time for Caviar.

Worsened financial realities

Taylor Hill, 22, is a sophomore communications major at Indiana University South Bend. She lives alone and was working 35 hours a week as a cashier at a Habitat for Humanity ReStore to support herself through her degree. But since being laid off in mid-march when the store closed due to the pandemic, Hill has been forced to evaluate if she is financially able to continue her education. 

"I've got at least $6,000 in debt, which isn't too bad, but I'm still a sophomore so I've got a couple more years to go. It's hard to say if going back would be financially responsible because I don't have anything in savings. I was working and living paycheck to paycheck," Hill tells CNBC Make It. "I honestly am not entirely sure how I'm going to dig myself out of this financial hole I found myself in."

She says this concern is shared by her peers. "Just about all of my friends are laid off right now so a lot of us are in the same situation," Hill says. 

In-state undergraduate tuition at IUSB is $3,447.49 per semester, but even at this relatively low cost, she is not sure she wants to continue paying that price for what is now an online education. 

"It's hard to focus without somewhere outside the house to go on a regular basis and I didn't sign up for online classes for a reason," explains Hill. "I need a lot of structure, so I'm having a hard time with just being at home and doing everything online."

The consequences for colleges and universities

Education experts predict that college enrollment will be lower next semester and many colleges and universities are unsure if they will hold classes in-person in the fall.

"We've talked to college and university presidents and many of our 1,447 member institutions and they are not sure what to expect," Lynn Pasquerella, president of the Association of American Colleges and Universities tells CNBC Make It. "There's some certainty with respect to a decrease in the number of international students that's already been in rapid decline with a 14% decrease over the past few years. And they're worried that this current global pandemic that has spurred an economic recession is going to further catalyze a depression, making it difficult for parents to send their children to college."

Pasquerella says the financial pressures of the economic recession will disproportionately force low-income students, students of color, international students, working students and undocumented students to drop out of their schools. She adds that "open-access schools" — public colleges and universities that admit at least 80% of applicants such as community colleges — that often educate underserved communities such as these, as well as small colleges with limited endowments, will be hit the hardest. 

Michael Horn, co-founder of the Clayton Christensen Institute, a nonprofit, nonpartisan think tank that researches disruptive innovation, confirms that college enrollment numbers will likely drop next semester. 

"I wouldn't be surprised to see enrollment in residential college programs drop by roughly 10% or so in the fall, and revenue to fall around 20% if students won't be able to attend in-person in the fall," he tells CNBC Make It. "On the flip side, I think we will see enrollments in online programs rise quite a bit, driven by adult learners — many of whom have been recently laid off — looking to wait out the recession and use their time productively by skilling up."

Opportunities for for-profit colleges — and risks for students

Indeed, Elise Awwad, vice president of strategic enrollment for the for-profit DeVry University, which typically costs between $20,000 and $33,000 per year for students who qualify for financial aid,  expects enrollment to not change significantly at her organization. 

"For DeVry University, because we've been in the online space for years, we are expecting somewhat similar levels of enrollment," she tells CNBC Make It. "But we are also anticipating additional concerns, which is why we're really focused on providing proactive care and making sure that we're addressing those concerns and that students are making an informed decision before attending." 

Awwad says because DeVry has long had online education offerings, it is prepared to offer the kinds technological support that remote learning requires. She emphasizes that DeVry is offering on-on-one support to help face the "additional concerns" students might be dealing with emotionally. 

But Pasquerella says she is concerned about the possibility that students who face the biggest challenges right now, such as students of color and low-income students, will turn to expensive for-profit providers that have historically had low completion rates. 

"I worry that the for-profits will take advantage of this moment in time when people are not working, they need to do something, they're looking for professional development and personal development," she says. "We've seen the perils of online programs in the for-profits where students have a very low completion rate and are left with large amounts of student debt."

According to the National Center for Education Statistics, just 21% of students at for-profit colleges graduate within six years. That rate is roughly four times higher at non-profit colleges and universities on average and at a school like Babson College, over 90% of students graduate in six years. 

"The risk is that students [at for-profits] will end up not completing their curriculum and they're left with debt burdens that they can't pay back because they're still unemployable as a result of not having a college degree," says Pasquerella.

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