Study: Places Most Dependent on Local Colleges and Universities to Boost Economy

 August 4, 2020
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As the coronavirus spread all over the world earlier this year, colleges and universities across the U.S. switched to remote learning to mitigate the possibility of outbreaks on campus. Now, even as the number of new cases in the U.S. continues to break records, many schools are planning to return to in-person learning this fall.

Countless metro areas rely on universities to keep their economies afloat. And some metros rely more heavily on them than others, according to Student Loan Hero’s latest research, making universities central to their economic futures.

Key findings

  • Lynchburg, Va., takes the top spot in our list, with just over 14% of people working for or attending a local college or university. There are seven colleges, universities or professional schools in the Lynchburg area.
  • Springfield, Mass., is second, with around 13% of the area population either working at or attending local places of higher learning. That’s 84,800 students and workers out of a total population of 631,800. Springfield is home to 13 colleges, universities and professional schools.
  • Lincoln, Neb., takes third, with just under 13% of the local population associated with colleges and universities in the area. Nearly 2,300 people work at universities or colleges, while 39,815 study at them.
  • At the bottom of our list is Lakeland, Fla., where just 4.5% of people work at or study at local institutions.
  • Roanoke, N.C., and Fort Wayne, Ind., round out the bottom three, each with 5.2% of their population either working or learning at local institutions of higher education.
  • Across the 100 metro areas analyzed, around 7.7% of the population either works for or studies at a college, university or professional school.

Table of contents

Top 3 metros most dependent on local colleges, universities

1. Lynchburg, Va.

Among the 100 metros with the most employees of colleges and universities, Lynchburg relies most heavily on these institutions. In fact, 14.3% of the area’s population works at or attends one of the seven colleges, universities or professional schools in the area.

The local institutions of higher education are generally private, which could boost their fall reopening plans. At least three of the schools within the Lynchburg metro — the University of Lynchburg, Liberty University and Sweet Briar College — plan to reopen for the fall semester.

New coronavirus cases are on the rise over a two-week period in Lynchburg, so that’s something to keep an eye on as these schools begin to reopen.

2. Springfield, Mass.

In this metro of 631,800 — higher than the others within our top three — just over 13% of the population attends or works for the 13 colleges, universities or professional schools.

Springfield has a mix of private and public institutions, and their plans for the fall vary. The private Western New England University, for example, announced the “vast majority” of classes will be held on campus this fall. Meanwhile, the public University of Massachusetts Amherst announced most of its classes will be taught remotely, which could put a damper on the metro’s dependency on its universities if students — and certain employees — don’t return to the area.

Of note, the June 2020 unemployment rate in the metro was 17%, the highest by far of the top three listed here. Cases within Hampden County — where Springfield is located — and the state have slightly increased in the past two weeks.

3. Lincoln, Neb.

Among the universities and colleges in Lincoln is the University of Nebraska-Lincoln, whose Big Ten football team is a major part of the local economy. Almost 13% — 12.6%, to be exact — of the local population attends or works for universities, colleges or professional schools in Lincoln.

Classes at the public University of Nebraska-Lincoln will begin remotely this fall, but only for the first week. At the private Union College, classes will begin next week — two weeks earlier than usual.

On the positive side, the unemployment rate within the metro sits at 7%, which is 4.2 percentage points below the national average. But Lancaster County — where Lincoln is located — and Nebraska have seen a rise in daily new cases over the past two weeks, which could threaten the metro’s school reopening plans.

Economic consequences to both remote and in-person classes

Colleges spent the spring and summer debating how to keep students and employees safe, weighing the potential for outbreak against the economic fallout of keeping schools shut through the 2020-21 academic year. As we’ve noted, some universities have decided to remain closed, while others plan to reopen campuses later this summer and during the fall.

There are economic consequences to either decision:

  • Areas where schools remain closed will experience immediate economic fallout as businesses struggle to survive and universities consider layoffs — or further layoffs. And money that students generally spend at pizza shops, malls and elsewhere wouldn’t benefit the area economically.
  • Areas where schools reopen will face the risk of outbreaks. In states where certain industries have been able to reopen, the possibility that local businesses and restaurants would need to close again if COVID-19 spreads on campus would cause even bigger waves in the community. As schools reopen, hotels and similar businesses may see short-term boosts as colleges figure out where to place students who need to self-quarantine before arriving on campus.

Adjusting college tuition with more remote learning

Many students have been waiting to see whether universities and colleges will adjust tuition costs with learning not always taking place on campus.

Some schools, like Princeton University, have announced tuition cuts. The New Jersey Ivy League school said it will cut tuition by 10% for the fall while most — if not all — learning taking place remotely. Meanwhile, schools like William & Mary in Virginia and Kansas City University have announced tuition freezes for the upcoming academic year.

Andrew Pentis, senior writer for student loans at Student Loan Hero, said he sees how some schools won’t be able to decrease tuition, but they may be able to find different ways to help keep students on campus. “This is where the schools that are better-run businesses … can get creative by both ensuring their campus is safe or their online learning environment is effective,” Pentis said.

Many universities are already anticipating the increased need for financial aid as the coronavirus crisis hits families hard.

What cities and towns can do to attract students and employees

  • Offer student loan incentives: Metro areas or cities could consider offering loan incentives to prospective students. For example, Maine offers a tax break for those who live and work in the state, among other requirements. While this would be a post-college benefit for graduates paying off public or private loans, a student with a particular city or town in mind might be intrigued to choose a school there if it’ll benefit them for years to come.
  • Provide opportunities for working students: Students may be more apt to move to a university town if they have a job or internship lined up through their school or a local government initiative. Students could find area jobs at grocery stores, restaurants, etc., but not having to initiate the search can go a long way for some.
  • Bring diverse companies to the area: Most students want more than just interesting classes and skilled professors. They’re looking for a well-rounded experience that includes potential for internships in their chosen field and a wide array of diverse opportunities they can put on their resumes. Having the right companies could entice students to stay in their college town during the winter and summer, boosting the local economy. These businesses could also benefit spouses of potential employees on the fence about moving to a particular town. If the right job is there for them, too, it may make the family decision easier.
  • Promote life experiences: Students move to different cities and states to get an education, as well as to experience different ways of life. The same can be said about college employees. Metro areas can promote gaining life experiences unique to their area, whether it’s hiking in wide-open spaces, learning how to surf along the coast or visiting art museums.
  • Make the cost-of-living argument: Some students and employees may find lower cost-of-living expenses an enticing reason to head to a university town, especially in times of economic uncertainty. By moving from major cities, you may be able to enjoy lower rent, dining expenses and gas prices in rural university towns.

Published in Press, Research