In-Person vs. Remote Mega Analysis:
American Rescue Plan Impacts
Modeling College and University Faculty, Staff, and Salary Changes
In the final video of Synario's In-Person vs. Remote Mega-Analysis, we will show how Synario can model new federal funding from the American Rescue Plan and layer in the student, auxiliary, personnel, endowment, and gifts impacts from our previous videos.
Why Does an In-Person vs. Remote Scenario Analysis Matter to Higher Education?
This is the biggest question facing higher education right now. Many financial leaders are asking themselves, “how would an in-person teaching scenario affect our financials versus moving to remote semesters for 2021 and 2022?"
Through this analysis series, we are hoping to help college and university decision-makers analyze and understand how the various impacts associated with these two scenarios can be modeled.
The Synario financial modeling software is ideal for this type of analysis, as it can layer in each micro-scenario and initiative independently, allowing finance professionals to explore their outlook faster than any other modeling software.
Welcome to the fifth and last video of our in-person vs. remote mega-analysis, where we examine how higher education institutions could model the various aspects of in-person vs remote teaching scenarios.
– In-Person Scenario –
Let’s jump right into our in-person scenario. From the in-person scenario drop-down, you can see that we have all of our in-person assumptions and initiatives turned on, while we have the American Rescue Plan assumptions turned off.
Our operating margin graph depicts the same financial projection as we saw at the end of our last video. In the value chart editors to the right, we can see our incoming American Rescue Plan funds totaling $8 million over two years, as well as a value chart showing our discount rate, which will come into play later.
Our example institution’s $8 million allotment from the American Rescue Plan was derived based on the American Council of Education’s methodology and estimations for the allotment of emergency relief funds. We’ve linked that resource in the description of this video.
Let’s go ahead and turn on our new ARP funding in our in-person scenario and see the changes in our operating margin.
Before we can celebrate our better outlook, we have to account for the restrictions included with our new ARP funds, including a minimum 50% allotment towards financial aid and grants for students. In this example, we will account for that allotment by increasing our discount rate for fiscal years 2021 and 2022, seen in the discount rate value chart editor. The remaining 50% can be viewed as semi-restricted one-time discretionary funds and should be invested in areas that will yield long-standing dividends for a given institution.
Let’s turn on our new discount rate assumption in our in-person scenario dropdown.
At this point, we have quickly incorporated new restricted funds into our financial projection and now can adjust other elements of our model to course correct and improve our institution’s long-term outlook.
In this example, we will adjust the endowment utilization rate as well as hire personnel for critical programs that will help the institution in the long run.
By selecting a lower endowment utilization rate for 2021 and 2022 as well as hiring personnel in 2022, I can bring my operating margin closer to baseline for 2022 and beyond.
– Remote Scenario –
Moving to the remote scenario, we can see what our operating margin would look like without the American Rescue Plan funds.
Similar to the in-person scenario, we can turn on the ARP funds and the associated discount rate to see an updated projection. However, unlike the in-person scenario, we will spend our discretionary funds on technology and learning management solutions for the remote scenario.
In our last video, we adjusted the endowment utilization rate for the remote scenario to about 7% in order to bring our operating margin closer to baseline for 2021 and 2022. With our new ARP funds, we only need to increase utilization to between 6 and 6.5% to achieve similar results while seeing an improvement in our 10-year operating margin projection.
And that’s a wrap for our in-person vs. remote mega-analysis. Synario’s agile planning platform allowed us to quickly incorporate additional funds provided through the American Rescue Plan, keeping our projection comprehensive and up-to-date in a matter of minutes.
Reach out to us through the link in the description if you would like to see a personalized demonstration of how Synario could make your college or university planning more streamlined and efficient.