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Under pressure from government, various US universities reject COVID-19 relief aid

Harvard, Stanford, Princeton and Yale universities said that they will reject millions of dollars in federal funding amid growing scrutiny of wealthy colleges.

Published: 23rd April 2020 09:05 AM  |   Last Updated: 23rd April 2020 09:05 AM   |  A+A-

Students walk past the statue of John Harvard in Harvard Yard at Harvard University in Cambridge

Students walk past the statue of John Harvard in Harvard Yard at Harvard University in Cambridge. (File photo| AP)

By Associated Press

CAMBRIDGE: Harvard University announced on Wednesday it will turn down USD 8.7 million in federal coronavirus relief, a day after President Donald Trump excoriated the wealthy Ivy League school over taxpayer money it stood to receive.

Similar action was taken at Stanford, Princeton and Yale universities, which said they too will reject millions of dollars in federal funding amid growing scrutiny of wealthy colleges.

Officials at Harvard said that the school still faces significant financial challenges due to the pandemic but will refuse the money over concerns that "intense focus by politicians" will undermine the relief program created by Congress.

"While we understand any reallocation of these resources is a matter for the Department of Education, 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," Harvard said in a statement.

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Trump later thanked Harvard and Stanford at a White House press conference, saying he was pleased the schools turned down the funding. "They stopped it. They're not accepting the money and that's great. So I want to thank Harvard. I want to thank Stanford," he said.

Congress is offering USD 14 billion to the nation's colleges and universities as part of a USD 2.2 trillion rescue package. Schools were allotted varying sums based on their size and the number of students they teach from poorer backgrounds.

But Trump said Tuesday that Harvard "shouldn't be taking" its share because it has such deep financial reserves. It echoed concerns from other critics, including some alumni, who said Harvard doesn't need the money and can rely on its nearly USD 40 billion endowment.

Education Secretary Betsy DeVos on Wednesday said that other rich schools should reject the funding. Affluent schools that do not primarily serve low-income students "do not need or deserve additional taxpayer funds," she said in a statement.

"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," she said.

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Only hours later, Senator Josh Hawley said that he was introducing legislation to block colleges from receiving coronavirus relief if they have endowments topping USD 10 billion. Under the proposal, those schools could access federal relief only after they spend a large share of their own money - an amount 10 times the size of their federal allotment - on direct aid for students.

About a dozen US schools have endowments large enough to be affected by the proposal. The higher education funding was meant to help colleges and students facing financial losses triggered by the pandemic.

If colleges accept the funding, they're required to spend at least half on direct grants for students. Harvard had previously committed to spending its entire share on students, and on Wednesday said it is "fully committed to providing the financial support that it has promised to its students".

Stanford, which has an endowment of nearly USD 28 billion, said it told the Education Department on Monday it would refuse USD 7.4 million allocated in the package. The school said it wanted to free the funding to be directed to smaller colleges that now face an "existential threat" because of the pandemic.

Yale expressed a similar sentiment, saying it wants its USD 6.9 million to go to "colleges and universities in Connecticut whose continued existence is threatened by the current crisis". Officials at Princeton said they will reject USD 2.4 million in aid, but not because of the pressure from DeVos.

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The school said it made the decision after the Education Department issued new guidelines forbidding the funding from going to students in the federal Deferred Action for Childhood Arrivals program for immigrants who were brought to the country illegally.

The school, which has a USD 26 billion endowment, said the rules were inconsistent with Princeton's values. Harvard also said the "evolving guidance" around the funding factored into its decision. More than 300 colleges were granted larger shares than Harvard, including some that also rank among the nation's wealthiest.

The University of Southern California, which had an endowment of USD 5.7 billion last year, was allotted nearly USD 20 million. Columbia University, with an endowment of USD 11 billion, was allotted nearly USD 13 million.

Major public universities received many of the largest shares, including Arizona State University, which was granted USD 63.5 million, and the Pennsylvania State University system, with USD 55 million. Wealthy colleges are facing new pressure to reject the funding amid a similar outcry over major companies that received emergency aid meant for small businesses.

The Shake Shack burger empire said it would return a USD 10 million loan after facing public anger.

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