Privately built dorms seen as key to controversial US reopenings

About a third of US universities have built student accommodation with private partners, a potentially underappreciated driver behind widespread campus openings in the face of persistent public health advice.

The phenomenon gained attention with a recent report that one corporate partner wrote to two public universities warning them against taking actions that might limit student occupancy in their dormitories.

The problem, however, may be far bigger, contributing to what some experts regard as the inexplicable decision by a majority of US colleges to open their campuses to students even while offering most courses online.

Housing revenue, said Eric Stoller, a private higher education consultant, appeared to be the most important financial factor other than tuition fees themselves that led US colleges into that position.

And outside partners, he said, may now be raising a major complication for controlling housing costs. Survey data by the Association of College and University Housing Officers-International show that about 34 per cent of US campuses are using public-private partnerships for some portion of their housing.

Details of such arrangements aren’t always clear, Mr Stoller said. But, he said of US colleges and their housing revenue, “If they were able to be fully transparent, the only reason they’re bringing most students back to campus is because they need that money.”

Joshua Brown, an adjunct professor of education at University of Virginia who studies institutional finances in higher education, shared the general concern.

Student reluctance to take online classes, and politically-incited scepticism in some parts of the country about the threat of Covid, were among many factors behind the embrace of campus reopenings this semester, he said.

But for many institutions, Dr Brown said, tuition and housing revenues were huge – accounting for as much as 95 per cent of total revenues – even without the added complication of satisfying outside investors.

The partnerships were a result, Professor Brown said, of cash-strapped institutions feeling that they needed help to afford construction, and not anticipating the repayment complications of a pandemic-driven shutdown. “Nobody foresaw this,” he said.

The case of the two public universities threatened by their private partner, as revealed by Inside Higher Ed, is crystallising the danger. The company, Corvias, told the institutions, the University System of Georgia and Wayne State University, they had no “unilateral right” under their contracts to either limit student occupancy of dorms or cut the housing fees that students pay.

“Speaking personally,” said Terry Hartle, senior vice-president for government relations at the American Council on Education, “I think it’s scandalous that Corvias would even have sent such a letter.”

But, Dr Hartle insisted, US colleges were not letting any kind of financing issues – with private companies or otherwise – dictate their decisions to reopen. “If campuses do not feel they can safely reopen, they will not do so,” he said.

Either way, just a week or two into the autumn semester, dozens of US colleges that chose to reopen already have encountered clusters of infections, blamed in many cases on large student gatherings. Several institutions have responded by ending in-person classes or closing down student residences.

Even institutions led by medical doctors, such as the University of Arizona and the University of Miami, brought back students and exhorted them to monitor each other’s behaviour, said Mr Stoller, an adviser to dozens of colleges and higher education associations. “It’s unconscionable really,” he said.

For those institutions that did share construction costs for dormitories, the choice of partner may be proving critical. While the privately-owned Corvias sent out its letters of warning, the nation’s biggest private dormitory manager, the publicly-traded American Campus Communities investment trust, has been offering aid.

So far during the pandemic, American Campus Communities has provided nearly $9 million (£7 million) in direct financial relief to more than 6,500 student residents at off-campus sites, and $15 million for those in on-campus communities.

The company was “committed to be compassionate to the financial hardships” created by the pandemic, its chief executive, Bill Bayless, told investors during a conference call.

A spokeswoman for Corvias said that she had no comment on the warning letters her company sent to its university partners.

paul.basken@timeshighereducation.com