Updated: Moving classes online will cost UD as much as $100M

The University of Delaware’s South Green | Photo c/o University of Delaware

NEWARK – After weeks of planning and debating, the University of Delaware made the difficult decision July 22 to move most of its fall semester courses online amid the continued resurgence of COVID-19 virus cases in the state and the surrounding region. 

It means that thousands of students won’t be coming to the Newark campus until 2021 at the earliest, leaving the university with a revenue loss upward of $100 million and the city of Newark with yet another economic blow. 

Restaurants and retailers throughout the city that depend on the annual influx of more than 22,000 college students are left to find ways to shore up their businesses with an estimated 60% fewer students returning in just a few weeks. 

UD faces varied fiscal hit 

With fewer students coming to campus, an increasing number of students applying for financial aid as families are hit by the economic hardship of the pandemic, and trips aboard for students called off, UD anticipates losing between $75 million and $100 million in revenue this fall, according to university spokeswoman Andrea Boyle Tippett. 

That reflects a $20 million increase in financial aid; lost room and board income of $20 million to $24 million; and $8 million from the Study Abroad program, she said. 

UD will also likely contend with a more difficult fundraising environment during the pandemic, a loss that isn’t accounted for in the revenue estimate, Boyle Tippett said. 

“In an environment where we will not be able to invite large groups back to campus for athletics games or special events, we look forward to finding creative and innovative ways to involve our Blue Hen community in the life of the university,” said Jim Dicker, university vice president for development and alumni relations. 

The university will not reduce tuition for online classes and out-of-state students will not see a tuition reduction, even if they take classes from home, because state residents pay less due to an appropriation from the Delaware General Assembly. Students will be able to take extra credits this winter or next summer for free though. 

“While the delivery of courses may be different, the university is committed to maintaining the high quality of instruction that students expect from UD to earn their degree,” the university wrote on its website regarding the move to families. “UD’s distinguished faculty continue to teach these courses, and the course curricula continue to prioritize the learning outcomes that faculty have established. In fact, the cost for online instruction is actually higher, reflecting the expense of computer equipment, software, instructional technology expertise and other needs. UD has invested significantly in education technology over the summer to ensure that students can continue their academic progress and graduate on time; those higher costs are not being passed on to students.” 

The university will limit dorm occupancy to one person per room with eligibility confined to students in classes that require in-person participation, such as engineering labs, hands-on nursing instruction, animal-handling courses, and music instruction. International students, students completing clinical rotations or field placement, and students who need housing due to hardship will also be eligible. 

Meanwhile, the online instruction will include most undergraduate and graduate classes as well as all courses offered in its Associate in Arts program. 

That means there will only be space for about 3,000 people in dorms that had a pre-pandemic capacity of 7,500. UD had 22,265 students on its Newark campus last year, with 18,135 of them undergraduates. 

Classes will still begin Sept. 1. All classes and final exams will shift online after Thanksgiving break. 

Will they come? 

The big unknown right now is how many students will choose to take a semester-long or year-long leave of absence and how many students will move into off-campus housing despite the move to online instruction. UD students normally sign leases during the previous fall with their leases starting on June 1, and many have already moved in. 

While upward of 3,000 students can be accommodated under the university’s plan in dorms, Newark has about 7,500 students who rent off-campus housing each year, according to city officials. Some business owners say they’ve heard estimates of upward of 9,000 students still being on campus this fall despite their coursework primarily being online – thanks to many students being locked in to off-campus housing rental contracts that started on June 1. 

UD area landlords did not return calls about whether they’ll let students out of their leases, given the situation. 

Boyle Tippett said incoming freshman who aren’t currently eligible to live in the dorms could choose to register for classes that would make them eligible – “although we’re not going to encourage that.” She also said that there’s evidence that some students who already have apartments are seeking to sublet them. 

What also concerns UD administrators is the result of a student survey a few months ago that indicated students were willing to wear masks and social distance in an academic setting, but less so in social settings, she said.  

The school did not survey students on how they feel about online classes, but it does expect fewer students this semester.  

“Our Enrollment Management area is putting together a packet to help students who chose to take a leave of absence to make good use of that time,” Boyle Tippett said, adding that UD will do everything it can to help students graduate on time within four years. 

‘We’re all disappointed’ 

The decision to move most courses online was also another blow to Newark’s downtown business owners, said Gianmarco Martuscelli, owner of the popular Main Street restaurant Klondike Kate’s and a board officer of the Delaware Restaurant Association. 

“To be frank, we’re all really disappointed right now. We thought the kids would be coming back,” he said. “We felt that with the numbers and the case counts going down that we were on the right path.” 

After losing all but a month of the spring semester and now losing most students in a fall semester, Martuscelli noted that his restaurant has essentially lost most of its customers for an entire year. Before the pandemic, Newark’s businesses also had to deal with the disruptive construction project on Main Street that drove away many customers. 

Ryan German, owner of Caffe Gelatto, has had to get creative in the last few months to bolster his business, including offering bagged ingredients as groceries to customers and starting a power-washing side business to keep his workers employed. The restaurant is a mainstay for students’ families, university conferences and even visiting athletic teams, but that also leaves its revenues heavily reliant on a university that has been quiet for months. 

“We’re on Main Street for a reason. Newark is a college town,” he said.  

While German had hoped to phase out some of his restaurant’s side gigs to focus on returning customers, he suspects they may be around for a bit longer now. He’s also looking to market the offering of a grab-bag of artisanal meats and cheeses that may not be found in traditional grocery stores. 

Cindi Brooks, owner of National 5 & 10, the preeminent, non-university-affiliated retailer for UD merchandise, said that her business has also faced difficulties, but she’s trying to remain optimistic. 

“People will be in town, there’s still a lot of students that live in apartments who are going have to eat and shop on Main Street,” she said. “It won’t be like a normal year, but I don’t think it’s going to be as bad as the complete shutdown.” 

Brooks said that her business has become focused on online sales, targeting families of new graduates and students as well as alumni. She noted that many customers were buying UD-branded party supplies to host graduation and acceptance parties at home. 

“What we were hearing from our customers was that getting the packages from our store was a highlight of their day,” Brooks said. 

During the pandemic, Martuscelli said that he’s had to cut back on staffing and the restaurant’s hours because the customers aren’t there. While Klondike Kate’s served upward of 90 lunches before the pandemic, he said they’re lucky to serve 20 right now with so many people still working from home. 

Although the residence halls may not be full this fall, Martuscelli said that he hoped the thousands of UD students who lease off-campus housing still come to Newark in the fall and patronize the city’s businesses while taking their courses online. He said that he too has already seen a number of students returning to campus despite the pandemic. 

“I just think students are tired of being at home,” he said. 

To try to capitalize on what students do return, Martuscelli said that he is planning to beef up Klondike Kate’s entertainment options, in a socially distanced manner, including live music, trivia, and more. 

“We just have to get the word out that it’s OK to come dine in our restaurants. We’re doing a lot to ensure your safety,” he said. “But needless to say, it’s going to be a long semester.” 

Editor’s Note:  This story was originally published on July 23 featuring the information about the financial impact on the university. It was updated July 30 with additional reporting from UD and other downtown merchants.

By Peter Osborne and Jacob Owens

posborne@delawarebusinesstimes.com

jowens@delawaresbusinesstimes.com