Brian Messing, Editor-in-Chief
Atlas Kulish, Section Editor
The COVID-19 pandemic has left a lot of universities strapped for cash as students who are mandated by the government to leave dormitories seek refunds, and new technology is expeditiously purchased to move classes online. Uncertainty about daily life extends to the finances of universities, and Saint Martin’s is no exception. Very little is known for sure about how the next few months, and even years will play out, however, there is plenty of time to examine the different scenarios.
In an interview conducted over Zoom, Saint Martin’s Vice President of Finance and CFO, Sarah Saavedra, said, “Saint Martin’s entered the COVID-19 crisis in a good [financial] position. We started this year with a strong freshman class.”
There will likely be a correlation between a university’s starting position going into the crisis, and how they perform after the crisis is over. According to Saavedra, “The institutions that entered strong in a good position, will exit in a good position.”
So, while Saint Martin’s may be suffering at the moment, most universities across the country are struggling with a similar plight. As 84 percent of universities expect some decline in enrollment, Saint Martin’s remains in a good position to recover from the crisis when it is all over.
To understand how long the financial ramifications of the COVID-19 pandemic will last, it is important to compare it to previous economic downturns. The most recent recession was the 2008-2009 financial crisis, also known as the “Great Recession.” As of now, retail sales tax revenue in Washington has declined by 8.7 percent, which is less than the decline that Washington faced in the great recession.
During this time of economic hardship, some universities, such as Central Washington University, have resorted to the use of a Financial Exigency in order to try and stay solvent. During her interview, Saavedra explained what an exigency is, and the repercussions that come with it.
“Financial Exigency is the formal declaration by the Board that the institution faces an imminent financial crisis and that there is a current or projected absence of sufficient funds for the campus as a whole to maintain current programs and activities at a level sufficient to fulfill its educational goals and priorities,” said Saavedra.
Such an acknowledgement that an institution is on the verge of bankruptcy risks its ability to attract qualified and desirable faculty and staff over the long term. Therefore, the seriousness of declaring a Financial Exigency cannot be underrepresented – especially for a small school such as Saint Martin’s. That said, Saavedra was confident in her response to questions about the likelihood that Saint Martin’s would make such a move, saying “That is not something that is being considered right now.”
Since the school is not considering an exigency at this time, funding is being sought from multiple other sources including fundraising, Small Business Association (SBA) loans, and funding from the CARES Act. While Saint Martin’s has been unable to secure any loans from the SBA due to restrictions on the number of workers a organization can employ to qualify, Saavedra expressed hope that there might be changes or provisions made to the criteria that would account for student workers – the group pushing the school past the 500 employee limit.
Additionally, the CARES Act, recently passed by congress, could serve as a means of relief for the university’s financial burdens. Saavedra believes that while the university is navigating such troubles, it is important to remember that students are also struggling, and the CARES Act could be a fantastic way to get monetary help to them. The current legislation is much more helpful to Saint Martin’s than stimulus bills passed during the great recession, since previous funding from the federal government was only afforded to public schools.
At this time, students probably still have many questions for the school’s administration and worries about the future; the unfortunate truth is that there are very few answers right now. Saavedra and others are working fervently to try and lock down plans for the coming year, and to try and find solutions to the many problems that students are facing. Though there might not be much certainty right now, the students of Saint Martin’s University can rest easy knowing that their school is doing what it can to help them during this stressful and trying time.