College Town Economies Strained by Coronavirus

Commencement Cancelations

This weekend, graduations were supposed to take place on lawns and in stadiums across the country. Now, instead, graduates and their families will be celebrating at home and watching virtual ceremonies. The commencement cancelations are not only painful for students, they are also extremely troublesome for the college towns and their economies which aren’t seeing the annual influx of visitors.

Universities in small towns support an ecosystem of restaurants, bars, hotels, apartment buildings, and other small businesses. Normally, graduation season provides a huge boost for these local economies before the summer slow-down when students leave campus. This year, however, these businesses will miss out on one of their busiest and most profitable seasons at a time that has already been difficult due to campus closures.

Business owners in college towns are also concerned about what will happen in the fall. If students do not return to campus next semester, some college town economies might be permanently damaged. “We’ve always had the luxury of being insulated from the normal ebbs and flow of the economy,” explained Mike Soriano, a bar and restaurant owner in Blacksburg, Virginia, where Virginia Tech is located. “But with the uncertainty of the fall, it’s made things difficult to project,” he said.

The Power of the College Town

Historically, university towns have been able to weather economic downturns relatively well. In fact, college enrollment tends to go up during recessions because job opportunities are fewer. Total college enrollment rose by 3 million students between 2006 and 2011, in part due to the Great Recession. A pandemic keeping students away from campus is something these economies have never experienced. “This is unheard of. We’re ready for a hurricane, a flood, a tornado. We even did an active shooter drill. We never did a pandemic drill. It’s hard to tell what is going to happen,” noted President of Washtenaw Community College in Michigan, Rose Bellanca.

Universities provide communities with highly educated people, well-paying jobs, and industry, all of which feed local economies. New technology hubs also stem from universities. Places like Austin, Texas, and the Research Triangle in North Carolina of Raleigh, Durham, and Chapel Hill, have flourished, thanks to the knowledge economy. Cities like Pittsburgh have been revitalized thanks to universities supporting economic activity.

Universities have been an important way to keep money and resources distributed in places other than urban centers. College towns spread across the country also help combat “brain drain,” a pattern of educated people moving away from communities where they grew up, often to larger cities. If the American college town does not survive this period of upheaval due to the pandemic, the impacts could be far-reaching.

Looking Ahead

Business owners and university administrators are hard at work thinking about creative solutions for reopening. However, even if students return in the fall, college life and the way college towns function could be significantly altered.

Several important sources of funding for universities will be reduced. State tax revenue has plummeted, which will result in less money for state-funded higher education.

Additionally, many of the 1 million international students in America who pumped $44.7 billion into the US economy in 2019 may not return to American campuses because of travel restrictions and public health concerns. Cancelations of fall sports, especially football, would also put a huge financial strain on universities. The people who provide food, parking, merchandise, lodging, and other goods and services to sports fans would also face hardships.

Graduates feeling unsure about the future this weekend are not alone. College administrators, students, and business owners have many unanswered questions about what lies ahead and how it will impact college towns.

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