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UC incurs over $500M in unexpected costs because of COVID-19

The University of California is facing $558 million in unexpected costs from COVID-19, with $310 million coming from March alone. (Daily Bruin file photo)

By Elizabeth Sherwood

May 3, 2020 3:35 p.m.

The University of California suffered $558 million worth of unexpected costs due to changes caused by the coronavirus pandemic.

The UC estimates that, in March, unanticipated expenses and lost revenue cost the University system a minimum of $310 million when excluding costs incurred by medical centers, said UC spokesperson Stett Holbrook in an emailed statement.

The shift to online platforms for instruction, setting up cybersecurity infrastructure, issuing housing and dining refunds, and additional cleaning measures and student health services have contributed to the new financial burden.

Increased costs also came from testing and caring for COVID-19 patients at the UC’s five medical centers, Holbrook added.

The UC is seeking government assistance for the shortfall in funding, but the promised help is far from sufficient, Holbrook said.

The Coronavirus Aid, Relief, and Economic Security Act, which Congress passed in late March, will provide economic relief for businesses and organizations enduring new financial hardship because of the pandemic. Over $220 million has been allocated to the UC campuses.

“From the federal government, the CARES Act will provide some much-needed relief for which the University is grateful, but the direct assistance that UC campuses will receive will not be sufficient to cover even the first month of our COVID-19 response,” Holbrook said.

The UC is also working with the state and holding out hope that extensive budget-increase requests will be approved, he said. The outcome still remains unclear, but the UC has confirmed that no changes will be made to tuition costs until more definitive answers regarding the budget are provided by the state.

UCLA has encountered similar difficulties due to the sharp decline in revenue from coronavirus-related changes, said UCLA spokesperson Ricardo Vazquez in an emailed statement.

UCLA is seeing revenue losses due to the cancellation of housing and dining contracts, academic conferences, and athletic and cultural events, Vazquez said.

UCLA’s conversion to online instruction has resulted in massive costs for systemwide technology upgrades, he added. Although UCLA is hopeful that the state will provide the needed budget increases, the outlook is uncertain, Vazquez said.

Aidan Arasasingham, government relations committee chair of the UC Student Association, wrote in an email that he believes that these crushing costs are a necessary burden the UC must carry in order to continue to best help its students during this time.

“In shutting down campuses, UC refunded housing contracts yet is still keeping housing and dining open for students in need,” wrote Arasasingham, a third-year global studies student. “UC is honoring contracts for all employees until the end of the academic year. UC is retraining and retaining service workers to support UC Health in battling the spread of this disease.”

When considering the alternative to paying these costs, such as layoffs, service reductions and shutdowns, Arasasingham said he considers the UC’s current course of action to be the best one possible given the circumstances.

If the pandemic continues into the fall, Arasasingham said he believes that state assistance is imperative to keep tuition costs consistent. Increasing tuition costs will place an even greater burden on students already financially struggling, he added.

“Going into the fall, the UC must commit to keeping tuition flat and lowering student costs during this global pandemic,” Arasasingham said. “Students were struggling with financial, housing, and food insecurity even before this crisis. Those needs have only been worsened as a result of this pandemic.”

All UC campuses have transitioned to online instruction for the remainder of the school year, encouraging students to cancel their housing contracts and finish the quarter from home.

UCLA has also announced all summer session A classes will also be online, with a decision about session C soon to follow.

No decision about plans for fall quarter has been released yet, but Chancellor Gene Block announced Tuesday that UCLA plans to give students the option of remote instruction for fall, even if some classes are offered in person.

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Elizabeth Sherwood | Assistant News editor
Sherwood is the 2020-2021 Assistant News Editor for the City & Crime beat. She was previously a contributor for National News and Higher Education. She is a second year political science and communications student and digital humanities minor at UCLA.
Sherwood is the 2020-2021 Assistant News Editor for the City & Crime beat. She was previously a contributor for National News and Higher Education. She is a second year political science and communications student and digital humanities minor at UCLA.
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