Three NYU administrators sent a university-wide email on Monday, April 27 detailing the university’s net losses due to the coronavirus and its assumed next steps for the coming months.
President Andrew Hamilton, Provost Katherine Fleming and Executive Vice President Martin Dorph stated in the email that the financial damages caused by the coronavirus — and the revenue losses that may come in the future — constitute the most money NYU has lost since the early 1970s, when it sold its University Heights campus to avoid filing for bankruptcy and subsequently moved to its current location at Washington Square Park.
“We have sought to support the NYU community and our academic mission and to act equitably; yet those actions have resulted in substantial additional unforeseen expenses,” the email reads.
The email stated that NYU has lost approximately $100 million over the course of the spring semester and is projected to lose $150 million during the summer. Additionally, the university has lost $60 million in housing and meal plan refunds, $3 million in financial assistance to students at Study Away sites and $4 million in emergency aid.
Budget Adjustments
The administration outlined its priorities while facing the coronavirus, which include the NYU community’s health and safety, the stability of the research programs, provision of financial aid, faculty retention, a quick and safe return to normal campus operations and sustaining the university in the long-term.
In order to reach these goals while still facing significant revenue shortfalls, NYU will be modifying its 2020-2021 budget.
Budget modifications will include a continuation of the university’s hiring freeze, which has been in effect since Monday, April 6. NYU will also maintain its ban on non-essential spending, which includes its current ban on non-essential travel, which has been in place since Wednesday, March 4 as well as all non-essential research, which has been in place since Friday, March 20.
Additionally, the email implied that some employees may continue to work remotely in the fall, which will require a redistribution of responsibilities; it did not elaborate beyond this.
The university is also planning to suspend salary increases for all employees, with the exception of employees whose contracts stipulate otherwise. Contracts with a yearly salary increase and/or a bonus will be subject to individual review, according to the email.
The contracts of both NYU President Andrew Hamilton and President Emeritus John Sexton have clauses stating that they will each receive $250,000 and $800,000 as annual deferred compensation and retirement pay, respectively. Their contracts have not yet been evaluated to determine if they will be receiving their annual benefits this year, University Spokesperson John Beckman said.
“The [benefits they receive] are deferred compensation in the case of President Hamilton and retirement pay in the case of President Sexton that was part of their overall compensation arrangements earned over a period of time,” Beckman told WSN in an email. “No decisions have been made at this time regarding changes to such pre-existing arrangements.”
The email states that if NYU still faces revenue shortfalls after making these changes, the university may turn to wage cuts.
“We are hopeful that these steps we will be taking will provide a sufficient cushion to see us through this profoundly unsettled moment without doing anything to jeopardize our ability to retain our dedicated employees and maintain our staffing,” the email reads. “Still, we would be irresponsible if we did not inform you all of the possibility that certain severe budgetary outcomes might require that we consider more serious actions, such as reductions in work hours, furloughs, or lay-offs.”
Though NYU’s email states that all financial decisions are made with the intention of preserving the university’s goals, students have become skeptical of what these goals actually are.
“The email says that NYU is not a business, it’s an educational institution, but that’s not always what it feels like,” CAS junior Jem Marriott said. “It feels like they make a lot of decisions based on what’s financially beneficial for the university over what’s good for the students.”
Gallatin senior Cam Mesinger agreed, saying the email was not sent in good faith.
“This is an institution that has more money than any of us will probably ever see […] saying that they can’t help out people on an individual level to make sure that they’re safe during a pandemic,” Mesinger said. “And instead they’re just letting us know how much money they do or don’t have, so that we can feel bad for them, so we stop asking them for money to take care of ourselves.”
Financial Loss
The email informed students and faculty that the university has lost around $167 million and is in a position to lose more. However, NYU does not commonly release detailed budget information — going so far as to remove its tax returns from its website every year — causing students to speculate as to why these numbers have been released at all.
Tisch first-year Trinity Posey does not understand why the university is releasing financial information at the current moment.
“We are literally in the middle of a global pandemic, and maybe we should address how all of this is affecting the students and the toll it’s taking on people’s mental health […] rather than telling me about your financial issues,” Posey said. “I just personally don’t understand what I have to do with their financial struggles.”
Marriott was specifically hurt by NYU’s mention of the prorated housing and meal plan refunds, which the email says cost the university $60 million.
“That’s not money you lost, it’s money that we gave you for a service that we did not receive,” Marriott said. “That’s how it works.”
Marriott continued, explaining that it seemed NYU was implying the money she needed had hurt the university financially.
“Getting [the] refund helps me now living off campus, and without that refund I would be in a much worse situation,” Marriott said. “Saying that the fact that I needed it is something that’s bringing the university down financially is a really messed-up thing to imply.”
Mesinger questioned the validity of NYU’s intentions in sending these emails, as well as its motivations.
“It seems like all the damage control they’ve done for the most part so far is to protect the institution as a separate entity from the students,” Mesinger said. “Any action that they would take beyond this […] would be at the expense of the students for the benefit of the institution.”
Some students have begun to question the purpose of the emails at all.
“I feel like a lot of the emails we’re getting are just completely inappropriate and tone-deaf,” Posey said. “Don’t they have people who should be reading these emails before they’re sent out? I just don’t understand why they think some of the things they say are acceptable, or that it’s the right time to say these things.”
Summer 2020
NYU will not be offering summer housing and both summer sessions will be conducted online, as was announced last week.
The university acknowledged that New York Governor Andrew Cuomo has not yet extended the state’s “NY on PAUSE” Executive Order — meaning that the state will likely reopen on May 15, though other parts may reopen later — and that NYU will also likely be taking preventive measures and operating remotely throughout the summer.
The university has also not made an official decision on student workers over the summer. NYU’s current position is that the university will only be employing student workers to maintain its essential facilities over the summer. However, the email stated that this decision is subject to change and is currently under evaluation.
Fall 2020
NYU currently plans to move forward with in-person classes at its New York campus during the fall 2020 semester, though it is keeping a close eye on potential setbacks caused by the pandemic. The email also states that NYU Abu Dhabi, which has continued to house students throughout the semester, and NYU Shanghai, which will begin allowing students back on campus next week, will decide whether to open their campuses in the fall based on local circumstances. However, the email does not mention if NYU plans to open its Study Away sites in the fall as well or what will happen if the sites are closed.
The email concluded with further confirmation from the Provost and the Executive Vice President that additional updates will be coming, and that the administrative team will be coordinating with schools to implement steps to save money and prevent further revenue shortfalls.
Regardless of the measures that NYU plans to take, it seems that students have had enough.
“Honestly, I was quite frustrated by the email because I’m just tired of the excuses from NYU,” Posey said. “If you don’t have money as one of the, quite frankly, richest and biggest institutions in the country, then it is not my fault that you are bad at managing your finances.”
Email Abby Hofstetter at [email protected].
