WASHINGTON — Three of the nation’s wealthiest universities rejected federal stimulus funding from the Education Department on Wednesday amid a growing backlash stoked by the Trump administration against schools with multibillion-dollar endowments getting a slice of the economic rescue money.
Harvard, Princeton and Stanford each announced they would give up millions of dollars they were allocated under the $2 trillion coronavirus package, H.R. 748 (116), that President Donald Trump signed into law last month. Their decisions came after Trump blasted Harvard over the funding and Education Secretary Betsy DeVos called on all wealthy universities to forfeit the stimulus money that her agency is in the process of doling out to colleges across the country.
Harvard "has decided not to seek or accept the funds allocated to it by statute," the university said in a statement. "We will inform the Department of Education of our decision and encourage the department to act swiftly to reallocate resources previously allocated to Harvard."
The university, which has a more than $40 billion endowment, was entitled to $8.5 million under the stimulus law, which allocates money to colleges using a formula based on enrollment, heavily weighted toward the number of low-income students at a school.
Harvard said it was concerned the "intense focus by politicians and others on Harvard in connection with this program may undermine participation in a relief effort that Congress created and the President signed into law for the purpose of helping students and institutions whose financial challenges in the coming months may be most severe." Harvard also cited "the evolving guidance being issued" by the Education Department about how colleges could use the money.
DeVos on Tuesday prohibited colleges from using the stimulus money to help undocumented students, including DACA recipients, or international students.
The rejection of the funding followed a growing chorus of anger, largely from Republicans, about wealthy universities receiving taxpayer help. Treasury Secretary Steven Mnuchin said earlier on Wednesday he had spoken to Harvard President Larry Bacow about the stimulus funding. “I think Harvard is thinking seriously about whether it’s appropriate for them to keep the money or give it to other institutions that need it,” Mnuchin said during an interview on Fox Business.
At least two Senate Republicans — Ted Cruz of Texas and Martha McSally of Arizona — had also called on Harvard to forfeit its share of the money.
“Schools with large endowments should not apply for funds so more can be given to students who need support the most,” DeVos said in a statement. “It’s also important for Congress to change the law to make sure no more taxpayer funds go to elite, wealthy institutions." She added that “wealthy institutions that do not primarily serve low-income students do not need or deserve additional taxpayer funds. This is common sense.”
DeVos praised Stanford University, which was the first university on Wednesday to announce it would reject more than $7 million in stimulus funds. The university said in a statement that it wanted to help keep smaller colleges and universities that are struggling because of the coroanviarus pandemic in businesses.
"We believe strongly in the importance of keeping these institutions viable in order to provide access to higher education for as many students as possible, and we had concluded that this should be a priority," the university statement said.
Princeton also announced it would not take the funding, concluding it did not need the $2.4 million in federal aid that it was allocated. Ben Chang, a university spokesperson, said the university had already taken steps to meet the financial needs of students resulting from Covid-19 and that it would "continue to look for opportunities to do so throughout this crisis."
Most of the nearly $14 billion in funding dedicated for higher education under the CARES Act, H.R. 748 (116), is allocated to colleges and universities based on a formula in the law. Colleges are entitled to a share of the funding based on the number of students they enroll, heavily weighted toward low-income Pell Grant recipients.
Colleges are required to use at least half of their share of the stimulus funding to award emergency cash grants directly to their students to help cover expenses like food, housing and child care. The rest can go to the institutions, with some restrictions. A Harvard spokesperson previously said that if the university were to take the stimulus money, the school would use the funding exclusively for student financial assistance.
The Trump administration has been examining whether a university’s allocation of stimulus money can be redeployed to other schools if the university returns the money or never applies for it. Education Department officials believe they can redistribute the money, an aide told POLITICO on Wednesday.
It’s not yet clear how the Education Department will reallocate the money. Harvard said in its statement that it hoped the Trump administration would consider sending the money previously allocated to Harvard to other Massachusetts schools "that are struggling to serve their communities and meet the needs of their students through these difficult and challenging times."
Even before the public backlash to Harvard’s share of the stimulus funding, DeVos had urged all college presidents to consider donating their allocation to other schools in their region if they didn’t need the money. She wrote in a letter to college leaders that “if you determine that your institution’s students do not have significant financial need at this time, I would ask that you consider giving your allocation to those institutions within your state or region that might have significant need.”
To access the funding, colleges and universities must sign an agreement affirming that they will properly use the money. As of Tuesday, about 50 percent of colleges had submitted that paperwork to access the student aid portion of the funding.
The Trump administration this week issued new guidance on how colleges could use the stimulus money. The Education Department prohibited colleges from using the funding to pay the salaries or bonuses of senior administrators or executives — and forbade for-profit colleges from using it for stock buybacks or shareholder dividends. The department also barred undocumented students, including DACA recipients, from accessing the emergency cash assistance.
Bianca Quilantan contributed to this report.
Read more: politico.com
