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Tracking COVID-19 at UCLA2020 Racial Justice Movement

ASUCLA faces lost revenue from pandemic, receives government loan

ASUCLA is under financial pressure despite loans received under the Paycheck Protection Program from the federal government. (Liz Ketcham/Daily Bruin senior staff)

By Bernard Mendez and Sydney Kovach

July 28, 2020 4:48 p.m.

Associated Students UCLA received a $4.7 million loan from the federal government, but still faces millions of dollars in lost revenue due to the COVID-19 pandemic, ASUCLA executives said.

ASUCLA received the loan under the Paycheck Protection Program, which is run by the United States Small Business Administration to encourage small businesses to keep workers employed during the pandemic.

ASUCLA lost millions of dollars in revenue during the COVID-19 pandemic, said Michelle Moyer, the director of Business Affairs and Compliance for ASUCLA, in an emailed statement.

As students transitioned to online classes and employees started working remotely in March, ASUCLA lost several of their primary sources of income, including sales from campus stores, events scheduled at Ackerman Union and the licensing of commercial products with the UCLA name, Moyer said.

Moyer said in May, ASUCLA faced a year-to-date net loss of $5.7 million. By June, ASUCLA expects their year-to-date income to be $14 million less than that of the 2018-2019 fiscal year, Moyer added.

Siena Villegas, a student representative on the ASUCLA Board of Directors, said ASUCLA expects to run a year-to-date deficit of $17.6 million at the end of July, $14 million more than that of the 2018-2019 fiscal year.

ASUCLA will be able to continue paying employees with using the PPP loan, said Noe Garcia, the USAC financial supports commissioner. He added that ASUCLA is unsure how long it can continue paying its employees since most ASUCLA services will not resume operations in the fall.

According to the Small Business Administration’s requirements for PPP loans, the agency will forgive the loan if ASUCLA spends at least 75% of their PPP loan on employee payrolls. ASUCLA expects to retain 500 jobs with the money from the PPP loan, according to data released by the Small Business Administration in June.

ASUCLA limited or paused the majority of its services March 20 to comply with public health guidelines and campus protocols, Moyer said.

ASUCLA has maintained some services, such as the Bruin Health Pharmacy and the UCLA Blood and Platelet Center, that are critical to the health and wellbeing of the community, Moyer said.

[Related link: The number of blood donations has dropped at UCLA, but the need for them hasn’t]

To minimize costs, Villegas said ASUCLA has decreased spending on inventory and was able to delay debt payments to UCLA on rent for Ackerman Union as well as other UCLA-funded projects.

Villegas added that the ASUCLA Board of Directors will have to cut programming funds that many campus organizations rely on to decrease the size of the deficit.

ASUCLA plans to reopen some of its services by adapting them to adhere to campus health guidelines, Moyer said. For example, ASUCLA may provide food services through delivery, she added.

ASUCLA also expects online sales of textbooks, school supplies and technology to increase because most classes are held online, Villegas said. The increase in online sales will cover a small portion of ASUCLA’s losses, she added.

The closure of ASUCLA businesses leads to uncertainty for student employees, especially for those on work-study, Garcia said. He added that he has received numerous questions from students originally offered work-study asking him how they will receive income remotely. Villegas said ASUCLA hopes to add work study jobs to handle increased online sales.

Because of ASUCLA’s financial situation, many returning students are also worried that ASUCLA grants they received in previous years will no longer be offered this year, Garcia said.

Garcia said the lack of detailed communications between ASUCLA and the student body has been a source of anxiety for many students.

“Communicating with us more would help create a sense of comfort between the students and UCLA,” Garcia said. “(It would help us) know that our school is actually doing well, and not maybe drowning in debt or unable to pay their employees sufficiently.”

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Bernard Mendez | News editor
Mendez is the 2020-2021 News editor. He was previously a staff news reporter for the Science & Health beat and a developer for The Stack. He is also a third-year math student at UCLA.
Mendez is the 2020-2021 News editor. He was previously a staff news reporter for the Science & Health beat and a developer for The Stack. He is also a third-year math student at UCLA.
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