Harvard And Other Universities Turn Down Relief Funds Amid Swell Of Criticism

Enlarge this image toggle caption Collin Binkley/AP Collin Binkley/AP

The public debate over the distribution of federal funds to small businesses has settled over some new battlefields this week: the campuses of wealthy universities across the country. On Wednesday, after a back-and-forth that involved President Trump and Education Secretary Betsy DeVos, Harvard University became the latest institution with a large endowment to announce it would turn down money from the recent federal relief package.

"Like most colleges and universities, Harvard has been allocated funds as part of the CARES Act Higher Education Emergency Relief Fund," the school's administration said in a statement, referring to the emergency relief package allocated by Congress last month. "Harvard did not apply for this support, nor has it requested, received or accessed these funds."

Harvard, which enjoys an endowment north of $40 billion — the largest endowment in the country, according to federal education statistics as of 2016 — took flak from the Trump administration earlier this week over the federal money it was set to receive. Trump targeted the university by name during his news briefing Tuesday, saying that Harvard accepted about $8.6 million in federal relief money; although he appeared to conflate the source of those funds with an already cash-strapped small business loan program.

That program, the Paycheck Protection Program, has seen a fair amount of controversy of its own, as critics have questioned why its limited funds have been meted out to relatively larger businesses such as Shake Shack (which is handing back the money) and a company with ties to Trump (which has not).

However, the money Harvard had been set to receive was not coming from the PPP, as Trump suggested at his briefing. Rather, it was coming from another channel set up by the congressional package, the Higher Education Emergency Relief Fund, which has been tasked with allocating roughly $14 billion of the $2 trillion package to institutions of higher education.

Regardless of the source, DeVos made clear that the administration stood behind Trump's broader point.

"As I've said all along, wealthy institutions that do not primarily serve low-income students do not need or deserve additional taxpayer funds. This is common sense," DeVos said in a statement released Wednesday. "Schools with large endowments should not apply for funds so more can be given to students who need support the most. It's also important for Congress to change the law to make sure no more taxpayer funds go to elite, wealthy institutions."

Harvard had initially said that it would allocate all of the funds to financial assistance for students in need because of the pandemic. But just hours after DeVos' statement, the university announced that it would neither seek nor accept the federal funds that had been linked with the school in recent days — despite the fact that it, like other universities, was facing "significant financial challenges due to the pandemic and economic crisis it has caused."

"We are also concerned however, that 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," an unsigned notice posted by the school said. It expressed hopes that other Massachusetts schools would receive special consideration with the reallocated funds.

Harvard's announcement came amid a spate of similar decisions by major private universities to turn down federal funds connected with the CARES Act. Princeton and Yale both said that they had not requested federal relief funds and would not accept the money, while Stanford announced that it has requested that its own application be rescinded — a move that DeVos applauded on Twitter.

It is unclear, though, what is in store for other "wealthy institutions" in line for federal relief funds — or precisely how DeVos defines that label. The four schools to turn down federal money all rank among the highest endowments in the U.S., though dozens of schools across the country estimate their respective endowments above $1 billion.

The University of Notre Dame, for one, has said it plans to accept the federal funds allocated to the school but use them only to "direct financial aid to students whose families have been struck by unemployment or otherwise upended by the pandemic." Recipients of the federal funds are expected to reserve at least 50 percent for emergency financial aid to help students with expenses related to coronavirus disruptions.