A group of top colleges said they wouldn’t take coronavirus relief money after receiving criticism from the Trump administration that their endowments were so big they didn’t need the money.
So the University of Pennsylvania turned down a $10 million check. Yale, Princeton, and Stanford followed suit.
Harvard, too, said it would not access the funds, saying that the “intense focus” by politicians around the school would undermine participation in the relief fund by smaller institutions.
Education Secretary Betsy DeVos expressed her thanks to the schools. In a tweet, she wrote: “I hope all schools who can afford to do so continue to let the money go to those in greatest need!”
The $14 billion emergency relief fund for higher education created under the Coronavirus Aid, Relief and Economic Security (CARES) Act is allocated to schools based on the number of full-time students who are eligible for Pell Grants, which are meant to support low-income students.
But allocations to wealthier institutions have come under scrutiny from lawmakers and the public, with many arguing that relief should first go to smaller institutions with fewer resources to weather the coronavirus pandemic.
Larger applicants for the $350 billion small business loans from the government have also come under the spotlight. Notably, Shake Shack returned $10 million in emergency relief after criticism flared. Ruth’s Chris Steak House also returned a $20 million loan.
Overall, investments for colleges took a beating in the first quarter, however, which should shrink endowments. Nasdaq’s endowment index dropped 20.24% for the first quarter of 2020, even as a benchmark portfolio of 60-40 stocks and bonds declined 13% during the same period.
The top schools, though, are not going hungry. As of its 2019 fiscal year, Harvard has a $41 billion endowment. Penn has $14.7 billion. Princeton has $26.1 billion. Stanford has $28 billion, and Yale has $30.3 billion.
All universities that won’t accept federal largesse insisted that the decision will not diminish their financial support for students, who deserted dorm rooms in the weeks leading up to the national shutdown to continue their lessons online.
The crisis has meant extra outlays for colleges. Schools have provided emergency funds for students to travel home, and other funds have gone to help those studying abroad. And student employees are still paid even as services have halted.