Dear members of the Rice community,
It seems hard to believe, but we are now more than halfway through the instructional portion of our fall semester, with classes ending in just four and a half weeks. I write today to provide brief updates on the current situation, planning for the spring semester and the financial landscape.
While things have evolved over the course of the semester, about 38% of our undergraduate students have remained in residence on campus (meaning the campus is at slightly more than 50% occupancy), with another 34% living off-campus but coming regularly onto the campus. Some classes have changed their mode of delivery as the semester progressed, and overall about half are being offered in hybrid form. Much research activity has resumed. Students are finding safe ways for social, artistic, civic and athletic engagement. Gradually, an increasing number of activities have become available. As I walk across the campus nearly every day, I can see that while it’s far quieter than most years, there is visible activity and opportunities for engagement, which our community clearly values.
Our COVID-19 testing positivity rate since Aug. 1 is approximately 0.1% , with over 42,000 tests administered on campus. (Harris County now has a roughly 6% positivity rate, down from 15% at the end of July.) Every part of our community has contributed to both the successful reopening of our campus and the provision of remote education and support services. In recent weeks, I have had the opportunity to meet via Zoom with a number of the extraordinary staff members who have made this possible, in areas like housing and dining, facilities, health services, information technology and others. The list of staff, students and faculty who have played a crucial role in this effort is long, and my and the university’s thanks go out to each and every one of you who have worked hard to deliver the best and safest possible experience under the difficult circumstances presented by the pandemic. But, as I said in a recent news media interview, if we let down our guard, things will move in the wrong direction. We must not let that happen at Rice. As COVID-19 cases surge across the country, we see the consequences of “COVID fatigue” and lack of vigilance. For now at least, we must maintain the measures we have adopted, including the wearing of masks, physical distancing and frequent surveillance testing.
Our students, graduate and undergraduate, have been critical to our success. Our SA and GSA presidents and other student leaders demonstrated leadership as they worked to preserve our sense of community and at the same time helped fashion rules that kept our students and the entire community safe. Graduate students have resumed research activity on our campus, working in our laboratories, the library or on their computers to support vital research efforts. Undergraduate students volunteered to serve as public health ambassadors. A small army is serving as tech TAs to help faculty members manage the challenges of hybrid course delivery. Small things matter in times like this, and efforts such as the reopening of Coffee House have had a big impact. Our students collectively have shown enormous responsibility, and that is the single most important reason the virus has remained in check on our campus.
Our faculty has worked tirelessly to provide a robust on-campus and remote experience. Hybrid teaching is not ideal, but it has enabled our students here in Houston to have an in-person experience, for which they have a clear preference, while preserving the opportunity for others to begin or continue their education when for whatever reason they could not come to campus. We know the semester has been especially challenging for our international students who remain abroad, most in very different time zones.
Spring Semester Plans
Now we must contemplate a spring semester under similar circumstances, and we must renew our efforts to improve the learning experience. We have recently conducted surveys of staff, faculty and students to assess the fall experience working, teaching and learning. The results of those surveys are just now coming in, and we are in the process of analyzing them to see what changes might be made in the spring to deliver the best possible educational experience and work environment, while prioritizing the health and safety of our community. We will consult with the Faculty Senate, the Academic Restart Committee (ARC), the SA and the GSA as we further develop the plans for the spring semester.
The ARC has recommended after consultations calendar modifications for the spring 2021 semester, including a later start on Jan. 25 and the elimination of spring break. Since we know the fast pace of the current semester has presented some challenges for students and instructors, we will build short breaks into the spring semester by including five “sprinkle days”—days off that will be spread through the semester, each on a different day of the week so that two long weekends are added into the spring academic calendar. The final schedule should be announced shortly.
With more information on both enrollments and endowment performance available, as well as some initial information on applications for next year, we can also now better assess our financial position. Our endowment last fiscal year (ended June 30) lost about 0.7%. This is down much less than expected earlier this year, but still a substantial difference as compared to the 7.5% returns we normally expect and which provide the largest single support for our budget. This directly affects the amount that can be paid out of the endowment in future years. Enrollment has remained strong, although we have provided additional financial aid to meet emergency needs and severe changes in financial circumstances. As previously reported, we had substantial COVID-related expenses and loss of revenues this fall, and that is expected to continue into the spring. This will bring the unbudgeted impact for this fiscal year to approximately $37 million, depending on spring COVID testing and other costs, and will have some mostly one-time budget consequences throughout our campus.
As a result of the downturn in the endowment and an expected slow economic recovery, we will in the next fiscal year (FY 2022) need to close a budget gap, which we estimate now at $12 million overall (about 3% of the core budget, which excludes research funding, housing and dining, and parking). We will need to make significant budget cuts and generate new revenues to close that gap. Depending on the pace and strength of the economic recovery, further cuts will be needed in FY 2023 and future years. We will, however, continue to support the excellence of our endeavors, to seize opportunities and to preserve employment to the extent possible.
We must become a more efficient operation if we are to achieve these goals, and this will inevitably include changes in how we deliver some of our services. Some new expenditures may need to be deferred. We will continue to pursue and make faculty appointments that will build the strength of our university, namely those that present an opportunity to truly make distinctive contributions to our excellence, including the diversity of our faculty and programs, and to contribute to strategic priorities and needs. A staff hiring freeze will remain in effect, with limited exceptions granted. As always, much will depend on the success of our fundraising endeavors, and the vast majority of new programs will need to be accompanied by new sources of funds or cuts in other expenditures. Our highest priorities for the next couple of years will be: to maintain financial aid to assure access and affordability for our students; to support our diversity and inclusion initiatives; to engage in focused, strategic and opportunistic faculty hiring; and to minimize job losses. We will be working over the next weeks with the deans, the Faculty Senate and others on further budget planning and guidance for this year and next to assure we achieve these aims.
We have been through a similar financial challenge before, and we emerged with success, strengthening Rice along many dimensions after the Great Recession of 2008-09. We are in a stronger financial position than most of our peers, because our non-endowment revenue losses are limited and we can adjust to the shortfall in endowment returns over time. We will continue to provide the best in educational opportunities and research that benefits our world. We will continue to build a diverse and inclusive community. We will continue in all we do to reflect our values of responsibility, integrity, community and excellence.
Let me close by thanking you again for the remarkable contributions from across our community. These efforts made our success this fall possible, and enabled us to continue carrying out our mission and to look ahead with optimism.
And please be sure to vote (if you’re registered) and get your flu shot.
With warm regards and deep appreciation,