Penn State Faculty and Staff:
The confluence of a pandemic, extraordinary financial stress and a social justice crisis have caused unprecedented challenges to our University. The stress and frustration are also exacerbated by our inability to make promises when change is constant and future circumstances are difficult to predict. We deeply regret that each of you have been operating in an environment where you are concerned about your physical and mental well-being, as well as your financial security. Certainly, each of these stresses weigh heavily on our efforts to focus on our shared purpose, which is our educational mission.
At the outset of the pandemic, we stressed that the University had three priorities: (1) the health and safety of our faculty, staff and students; (2) completion of our mission of educating students; and (3) the financial well-being of our employees and our community. Failures in social justice, health disparities and the clear evidence of systemic racism and bias amplify and extend the importance of these priorities. Although we face considerable uncertainty, we want to reaffirm our commitment to your security.
Our commitment to health and safety related to the pandemic remains as the highest priority. We began with the promise to meet or exceed the guidance from the state of Pennsylvania and the CDC for testing. Few found this commitment sufficient. Unfortunately, federal approvals, supply chain issues and testing capabilities prevented us from providing a more detailed and complete plan at that time. We have been working diligently on a robust capability, guided by medical science, of testing and contact tracing that is based on partnerships with private providers, local and state governments, and growth in internal capabilities. In addition, we have been working to mass purchase masks and hand sanitizer stations, modify classrooms and outline rules for enforcement. We have had a strong focus on safety for those with underlying medical conditions or who are high risk. We continue to follow Pennsylvania guidelines that those who can work at home should continue to do so. As our plans crystallize, they will continue to be posted on virusinfo.psu.edu. A robust capability for testing, contact tracing, isolation and quarantine is a critical and necessary requirement for face-to-face education. The University is preparing to announce the implementation of a comprehensive testing and tracing plan in the very near future.
Our approach to the mode of teaching is also a key factor in ensuring that faculty and graduate students feel safe in the classroom. Our approach has been to ask the faculty for their preference and to work with academic leaders to understand the academic requirements and the health and safety needs of faculty and graduate students. Interestingly, our challenge is to find sufficient classroom space, given social distancing requirements, for all of the faculty who do wish to teach face to face or in hybrid mode. We continue to work at optimizing classrooms and adding other spaces to our inventory, given the desire of both students and faculty for face-to-face or hybrid teaching.
Further, our focus on multiple modes of teaching, multiple choices for students, with the associated purchase of equipment like microphones and cameras, is designed for us to be nimble – nimble to help a student who is under quarantine continue their studies, nimble for an international student who cannot attend in person and nimble if health conditions or testing limitations require us to move fully remote. Likewise, the decision to move fully remote after Thanksgiving is entirely based on health concerns and limiting the potential to reintroduce significant new viral infections into our community.
We would also like to put to rest the mix of rumors that the administration would somehow utilize information on teaching requests or challenges to remote delivery to penalize. Our commitment should be obvious from our shared governance work with the University Faculty Senate to modify the tenure clock and limit administrative use of SRTEs as we switched to remote education in the spring. We will absolutely continue to work in partnership with the Senate while we consider alternatives, and importantly, as we develop tools to enable faculty to engage in critical teaching and research.
The financial stress on our University is clear. As a tuition-driven University, enrollment overwhelmingly governs our budget. Our best estimate of revenue for our educational budget is a loss of between $130 and $150 million for the current year. Some scenarios suggested the loss could be much greater, nearly a half a billion dollars with continued significant losses for multiple years. Further, our auxiliaries have been heavily impacted as we returned housing and food contract dollars to students. Our hotels and other facilities are generating no income. Yet, we made a public promise to support the financial well-being of our employees. Even with approximately 2,000 employees who could not come to work and could not work from home, we committed sufficient salary, that when added to weekly federal stimulus payments, has made our employees whole and enabled them to keep their benefits. This plan was overwhelmingly approved by the Teamsters. We continued to pay other employees who could only work part-time from home at their full salaries. We exhausted the reserves in our auxiliaries in order to keep our commitment to our employees. Today, with one painful exception, because we will close a hotel for the long-term in order to use it for housing, we are continuing our commitment to keep our employees whole.
Unfortunately, our commitment is not without limit. The worst-case scenario, with multiple years of large deficits, would put the University in an untenable position. Some have suggested that the wealth of our endowment would save us, and that we could continue to promise salaries and even raises for the long-term despite significant decreases in enrollment. However, more than 90% of our endowment is restricted either by binding agreement or to service debt or to support promised scholarships, and 8% is committed directly to specific colleges. Only about 2% is truly unrestricted. It would be fiscally irresponsible to make long-term promises in the midst of the pandemic under these conditions. However, we believe that through our hard work and efforts to manage our resources, we can continue our commitments to our employees. As insurance, the Board of Trustees authorized a line of credit totaling $250 million for the University if needed to weather the storm.
We understand that the current lack of details on much of our important planning has caused stress for many on our campuses and in our communities. We will be announcing in the next few days another town hall meeting at which we will share more information about specific plans and action items to be ready for a return to campus.
We face another profoundly important crisis, born of a long history of systemic racism and bias in our country. Reversing systemic racism and bias is a moral imperative and will require persistent and consistent effort and investment. But current events have demonstrated an urgency if we are to protect the health and safety of our community and ensure that our students reach their educational goals. The character of the crisis is very different, but the impact on mental and physical health and the impact on educational opportunity are extraordinary, and are amplified by the pandemic. The actions announced in my June 10 letter, and the proposals expected from the Select Commission on Racism, Bias and Community and other task groups must be a priority for the University. The results of these deliberations and University actions will be posted at actiontogether.psu.edu.
The challenges are unprecedented, but we are guided by our commitment to faculty, staff and students. We recognize the stress and frustration caused by our inability to make promises in many cases due to the ever-changing landscape that we face. We do promise to focus on our priorities to the best of our ability.
Eric Barron
President, Penn State