Harvard Gives In To Trump Demand To Return Coronavirus Stimulus Money


Thursday, April 23, 2020

Initially, Harvard said it would not comply with President Donald Trump’s public call to return $8.6 million in taxpayer funds.



Harvard University will return $8.6 million that it received from a coronavirus relief package that Congress passed last month after there was a public dispute with President Donald Trump and his administration.

The about-face came just hours after Education Secretary Betsy DeVos called on lawmakers to ban “elite, wealthy institutions” from receiving funding from the federal coronavirus stimulus package.

“Wealthy institutions that do not primarily serve low-income students do not feed or deserve additional taxpayer funds,” DeVos said in a statement Wednesday. “This is common sense. Schools with large endowments should not apply for funds so more can be given to students who need the most support.”

Within hours Harvard officials capitulated.

"We have previously said that Harvard, like other institutions, will face significant financial challenges due to the pandemic and economic crisis it has caused," officials said in a statement. "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. As a result of this, and the evolving guidance being issued around the use of the [funds], Harvard has decided not to seek or accept the funds allocated to it by statute."

This decision follows a lot of criticism, including from the president, Treasury Secretary Steven Mnuchin and Senate Republicans, who pressure Harvard—an elite Ivy League school with a $41 billion endowment—to return the public funds it secured.

“Harvard’s going to pay back the money. They have one of the largest endowments anywhere in the country, maybe in the world, I guess, and they’re going to pay back that money” said Trump.

The $8.6 million was part of $14 billion earmarked for all institutions of higher education included in the $2.2 trillion coronavirus relief package. The funding was automatically directed to thousands of public, private and trade schools through a set formula that took into account, among other things, the number of low-income students that colleges and universities enroll and the overall size of schools.

Colleges and universities must use half of the funding for emergency cash grants to students and the other half to shore up on their own financial losses stemming from the coronavirus pandemic—the latter which has crippled many universities, especially those with small endowments.

For a school that enrolls 6,500 students, 16% of whom are considered low-income, Harvard’s pull was in line with the other schools that have similar profiles.

Critics argue that an endowment as large as Harvard’s could bolster students who find themselves in financial distress and shore up its own institutional financial risks. President Lawrence Bacow said the schools’ endowment is taking a significant hit in the financial downturn and it needs to prepare for a scenario in which students can’t return to campus in the fall.

On Tuesday, Harvard officials shared they planned to direct the entirety of the funds to students in financial crisis due to the pandemic.

“Harvard has committed that 100% of these emergency higher education funds will be used to provide direct assistance to students facing urgent financial needs due to the COVID-19 pandemic," said Jonathan Swain, Harvard spokesman.

The school backtracked under a crush of continued criticism.

"We will inform the Department of Education of our decision and encourage the department to act swiftly to reallocate resources previously allocated to Harvard. We hope that special consideration will be given to Massachusetts institutions that are struggling to serve their communities and meet the needs of their students through these difficult and challenging times,” officials said in the statement.

This decision comes in the wake of a letter DeVos sent to colleges and university presidents on April 9, asking them to assess student financial need and redirect any stimulus funding to other schools whose students may face bigger financial hardships.

"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."

Stanford University was the first to announce that it would return the $7.4 million it received from the federal relief package.

On Wednesday, Stanford announced via Twitter: "We realize that this crisis represents an existential threat for many of the smaller colleges and universities that are such a critical part of the fabric of higher learning in the United State. 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."




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