Covid-19 and LUMS’ Financial Blues

By Abdul Wasay Ali Khan

Student skeptical of campus finances as LUMS continues online learning

When Dr. Arshad Ahmed claimed at the Open House earlier this summer that LUMS was losing out financially with operating online, his comments left many students bewildered. Repeatedly, skepticism in the student body prevails despite a recent email from Dr. Arshad where he elaborated on the financial setbacks that come with operating online.

 Many students believe that LUMS would have had to incur a lot more costs had the semester been hybrid and has taken a cost effective approach by going online. The logistics involved with a hybrid semester account for many more expenses than they have incurred for a totally online mode. In an attempt to gain some insights into the finances of LUMS, The Post reached out to Dr. Arshad and Zunair Zafar, CFO of LUMS who both remained steadfast that LUMS stands to lose by a virtue of an online semester.

What is the net effect on finances of operating online?

The LUMS administration remains steadfast on their claim that an online semester puts immense strain on their finances.

Dr. Ahmed said, “The added expenditure that we have had to incur to adjust to an online semester, along with the lost revenue streams, have far outweighed the savings we have made by not operating on campus.” He also added, “To further strangle our budgets, we have also reversed the initially planned 13% fee increase and have continued to financially support students to make LUMS more accessible than ever.”

Ammar Shahid ‘21 who has been on the forefront of the campus reopening, argues that, “Accounting for inflation and looking at the past financial statements, I can confidently say that LUMS has saved around 300 million by not going hybrid this semester”.  

What are the potential savings and added expenses by going online?

Zunair Zafar, CFO of LUMS, on the matter of financial savings by an online semester said, “We have saved on utilities and travel expenses of faculty, but they are far less than the expenses incurred on software licenses, servers, training workshops, student-faculty collaborations and the various other expenses incurred to ensure a smooth online shift. ”

Shahid ‘21, however, is among those students who remain skeptical of this claim, and said, “The massive amounts saved through utilities and travel expenses have offset the expenses to shift online and the numbers from the past can be used to validate that.”

On the other hand, whether LUMS has incurred these expenses by spending smartly also remains ambiguous, given that some students feel that the tangible benefits for these expenses are yet to manifest.

Taha Waseem ‘22, particularly displeased by the current state of the online situation, said, “It is hard to believe that LUMS spent heavily and prepared extensively for this online semester. In spite of all these supposed workshops and collaborations, we still have instructors who do not know how to mute participants on zoom and the quality of learning is far from on campus learning.”

What are the lost revenue streams?

Zafar also stressed on how LUMS has lost out on various revenue streams by operating online. He said, “Hostel revenue has been wiped off whereas the revenues from our 19 centers at LUMS have taken a significant hit too. REDC alone has lost out on roughly 45 million rupees due to its programs coming to a sudden halt.”

Zafar also added, “Loss in terms of donors is also real. The corporate world has gone into a safe mode and that is a loss in opportunity for us. Our expectations from them for the immediate future have, for sure, gone down.’

Lack of donations, however, does not have anything to do with an online semester. It is the overall economic turmoil due to COVID-19 that has prompted this. 

In spite of all these losses, Dr. Arshad claims that the financial aid levels haven’t gone down. “We still support 1 out of 3 students at LUMS despite the financial crunch.”

Has the summer semester eased the financial turmoil?

While the Vice Chancellor in his email extensively talked about added expenses and lost revenues due to COVID19, the email did not mention the financial gains that came through this year’s two summer terms. According to Dr. Arshad, over 1400 students enrolled into these courses. This high enrollment in these courses was widely attributed to sudden change in fee structure and also to an online mode of learning.

Nubeed ur Raheem ‘22 took two courses over the summer semesters.  “I only took these courses because of the fee structure which was initially implemented on a per credit hour basis plus online mode meant that I had something to do over an otherwise quarantined summer.”

This also goes on to show that LUMS did make a huge gain on the financial front due to the unprecedentedly high number of students enrolling into the summer courses. Calculations by The Post suggest an inflow of around 80 million rupees in form of tuition fee during the two summer terms.

The financial aspect of a hybrid semester

While a few revenue streams have been foregone by LUMS by operating online, such as hostel revenue, and the potential increase in fees, it is hard to believe that LUMS has not benefited by not operating in a hybrid mode like IBA, Habib and many other universities all across the country. While a complete online semester is pinned to the safety of the student body by the administration, the financial cushion that it provides to LUMS should not be downplayed.

A hybrid semester would mean that LUMS would have had to operate both online and on campus simultaneously which would mean added expenses for LUMS.

Dayem Rehan ‘22 said, “Air filters, sanitizers, sanitizing gates, along with the many other equipment needed to cater to the student body on campus has clearly been avoided by a complete online semester.”

While LUMS may have felt a financial jolt like many other institutions due to the overall economic hit owing to COVID-19, it may have notoriously reduced the extent of loss by deciding against a hybrid semester. The university administration continues to argue against the widespread notion that going online helps ease the financial burden. However, a large segment of the student body remains unconvinced by this claim and continues to severely censure the administration for operating online which many students claim is ‘cost effective.’

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