A Financial Crisis, Then Coronavirus. Lebanese Universities Could Still Thrive.

This article was first published by the American University of Beirut’s Issam Fares Institute for Public Policy and International Affairs.

The impact of the novel coronavirus (COVID-19) pandemic, combined with the economic distress caused by Lebanon’s financial crisis and months of protests, will have a long-term fallout on the country’s higher-education institutions. The cumulative effect of the many challenges that the higher education sector in Lebanon currently faces raises some critical questions. What does the future hold for higher education in Lebanon? Will we see more universities close? Merge? Expand? How will universities reach their students when access to campuses is forcibly halted? These are all questions that institutions of higher education in Lebanon have started facing, in light of the coronavirus crisis and economic distress affecting everyone in the country.

The higher-education sector in many countries has suffered from economic crises. Universities in Venezuela, East Asia, and the United States all endured the impact of the 2008 economic downturn which pressed higher-education institutions into taking different forms of actions based on their circumstances. The novel coronavirus pandemic has also hit hard all institutions of higher education globally, leaving over 700 million learners at home.

Lebanon has been enduring financial strains since 2015, with a drastic deterioration as of October 2019. More recently, Lebanon has quickly become one of the countries hit hard by the novel coronavirus. These crises have severely affected middle-income groups who are the traditional clientele for local higher education. In general, the crisis has a negative impact on the ability of households to spend money, particularly on health and education, and primarily due to reduced incomes. The recent health crisis has rendered vulnerable families even more at risk due to its impact on the economy. It is expected that households will reconsider investing in education because they are more concerned with filling basic needs. However, household response to the crisis may be delayed, particularly given that families in Lebanon are highly committed to education. This is evidenced in the high private expenditure on education in the country estimated at 1.45 percent of GDP (World Bank, Lebanon: Education Public Expenditure Review, 2017).

Earlier in 2019, a number of universities required the payment of tuition fees in dollars and imposed restrictions on students who do not pay fees on time. However, this could not be sustained as students were not able to comply, and universities were keen on maintaining enrollment. More recently, and in response to the financial crisis, universities in Lebanon began implementing austerity measures such as budget cuts, reduction in staff, freeze on wages and curbs on facilities and equipment. In such situations, faculty members also feel threatened, as some may lose their positions, salaries or benefits. It is therefore critical to rethink how these health and financial crises and institutional responses will reflect on the quality of higher education, particularly in light of changing enrollment rates.

Enrollment trends at universities in Lebanon for the academic year 2020-2021 have yet to be determined as the economic crisis evolves. It is estimated that 60 percent of higher-education students in Lebanon are enrolled at private universities charging fees. Even students enrolled at the tuition-free, public Lebanese University incur costs related to their higher education, such as transportation, lodging, etc. The commitment of families in Lebanon to their children’s education remains unquestionable so far. However, it is expected that with the devaluation of the national currency and the reduced capacity of households to afford education, this commitment may not persist.

A decline in enrollment is one of the first expected impacts of the crisis on higher education in Lebanon. Enrollment decline will not only be caused by fewer students entering universities, but also due to a rise in the number of students dropping out. It is foreseeable that students on loans will not be able to continue their higher education, as banks have stopped most loans, and students do not have the means to repay existing loans or to take out new ones. If the number of applicants at local universities increases, while enrollment rates decrease, this may indicate that while the aspiration for higher education is still strong, the means for students to actually enroll and pay their way do not exist. The Central Administration of Statistics data shows that drop-out rates in education are highest among children and youth who come from the poorest families in Lebanon.

What Will Happen in the Next Academic Year?

Well, it may be surprising but enrollment may not decline as expected! Enrollment may actually increase for several reasons. Many students studying abroad may return to Lebanon as some households will not be able to afford the cost of study abroad. In addition, international wire transfers have been decreased or in some cases even stopped, so parents can’t transfer tuition and support for living costs to children studying outside of Lebanon. Therefore, these students will enroll at local universities. Moreover, the increase in the strength of dollars compared to Lebanese pounds makes studying in Lebanon more affordable for foreigners. This, coupled with some level of political stability, could attract foreign students to pursue higher education in Lebanon. Finally, an increase in enrollment at local universities may be expected as unemployment rises. The opportunity cost of higher education declines during the crisis as a result of the unemployment and a prolonged waiting period for youth in the labor market. More secondary school students may choose to pursue higher education instead of remaining unemployed. But absorbing the returning and additional local students after having suffered budget cuts and staff reductions within the universities, may result in a decline in quality.

It will be important to also observe patterns of enrollment that may emerge. Since the financial crisis hits the middle class the hardest, a shift from colleges with high fees to institutions with low fees and to Lebanon’s one public university may be the new trend. Many of the less expensive universities already have ways to support students in place, even prior to the crisis, which will attract students. However, these institutions with lower fees are the ones that struggle with the quality of education they offer.

Preparing for the Next Academic Year

• Look for online alternatives:

Universities should be prepared to offer alternative learning modes. Online learning presents the opportunity to decrease costs and reach a wider population of students, particularly in difficult times such as the current health emergency. During Venezuela’s socioeconomic and political crisis in 2016, university students were unable to attend classes due to financial and safety reasons. Many universities began providing online lectures and distributing study materials  over the Internet. Today, and in light of the COVID-19 outbreak across the country, and due to forced institutional closures, most higher-education institutions are trying to transform face-to-face classes to online classes. Online education could also bring in new revenue if universities could recruit students from outside Lebanon. However, it is important to highlight the need to prepare faculty and staff members to support this alternative teaching and learning modality in order to ensure quality, credibility and learning.

• Freezing the Tuition Increase:

The recent crises are leading to an increase in unemployment and a sharp decline in household incomes, particularly among the middle-income families who are the primary clientele for higher education. Therefore, families will reconsider how to spend their money and whether to pay tuition at private universities. Universities should seek to maintain enrollment rates and to avoid drop-outs that may be caused by increasing tuition fees. Many universities are forced to increase their tuition to maintain economic balance, especially given that the official exchange rate for the dollar remains different from what is traded in the marketplace. Institutions as well as the government must cooperate to freeze tuition increases. During the economic crisis in South Korea in 2011, the government issued a policy to limit tuition increases at all local universities. A tuition freeze, coupled with financial stringency may stop any potential enrollment decline.

• Introducing Management Reforms:

Higher education institutions can take advantage of these crises to conduct a self-assessment of their operations and governance. Institutions may be able to introduce reforms that would enable them to improve institutional governance and the quality of education. Universities should acknowledge the need for reform at the level of their management systems and administrative structures and seek efficiency. The Lebanese University is one of the public institutions that would benefit the most from such an exercise, particularly considering that 20 percent of the government education budget is dedicated to the university, which enrolls only 40 percent of the students in higher education.

• Equity in the Distribution of Resources and Funds:

The impact of the crises on higher education will depend on household responses to the demand for education. Universities should consider the fact that people come from different socio-economic backgrounds and have been differently impacted by the crises. Given the reduced role of the state, the safety nets that may be implemented may not impact students seeking higher education. Scholarships, student loan programs, and any form of social support should be distributed equitably. Both needs-based and merit-based scholarship programs are important to support the continued demand for higher education.

Education in Lebanon evolved from being a pathway for economic mobility, to being only a privilege for some. In conclusion, no matter what scenario may emerge, it is important to maintain education as a public good. It is also important that Lebanon realizes that it needs to keep up with global trends in reaching all learners. The private sector response is not enough to curb the impact of the financial crisis on the higher-education sector in the country. Public policy response is critical to maintain priority to education, and to rally for increased funding for the sector. The future, by definition, is unpredictable. However, by being attuned to learning, financial trends, and emergency situations, we can learn to adapt to whatever future may be coming our way. The ongoing crises present the opportunity for Lebanon to define a new vision for higher education, one based on quality, equity, and sustainable development. What scenario will we have for the academic year 2020-21? It is in the hands of Lebanon to decide.

Hana Addam El-Ghali is the director for the Education and Youth Policy Research Program at the Issam Fares Institute for Public Policy and International Affairs at the American University of Beirut.