Thursday, April 24, 2025
HomeEducationAmerican University Estimates $100M Shortfall in Revenue

American University Estimates $100M Shortfall in Revenue

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American University sent a letter to its students and staff, saying that it could lose up to $100 million in revenue in the worst case scenario over the next two years due to the coronavirus pandemic according to its projection.

The university’s president, Sylvia Burwell, wrote in the letter that the economic fallout from the coronavirus crisis is also likely to cause increased costs for fiscal year 2021. Over 50 percent of the annual budget is used for paying the staff.

“Given that 92 percent of our revenue comes from tuition and fees, if enrollment is down 10 or 20 percent with a corresponding effect on housing occupancy, we will be facing intense budget pressures in every part of our operations,” Burwell said.

The president explained that her team is taking various actions to mitigate the expected shortfalls and to meet enrollment goals for current and incoming students. All schools, colleges, and administrative units are asked to find additional cost savings and ways to reduce non-personnel spending.

They are also planning to draw on unrestricted income from their funding and use reserve and contingency funds that were established in previous years.

A previous projection suggested a $27 million loss for the spring and summer. American University’s FY2021 annual budget is around $775 million.

The university switched to operating largely online starting from Monday, March 16, while it was not closed and continued keeping limited services available on campus.

Classes moved online at the institution on March 18 and they will remain online through the summer, and no on-campus instruction will be offered for the summer semester, including at the Washington College of Law (WCL).

The university’s services such as counseling, advising, and academic support are available online.

“The university is now in the recovery and renewal phase of our COVID-19 operations with a comprehensive effort to chart our path for the fall semester and beyond,” it was written in a statement released on Friday, May 29.

A COVID-19 Resources page on the university’s website provides information about the university’s actions, updates to the community, and answers to frequently asked questions for students and parents, faculty, and staff.

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