Coronavirus aid

DeVos urges wealthy colleges to give up their coronavirus aid

By MICHAEL STRATFORD

Education Secretary Betsy DeVos called on the nation’s wealthiest universities to turn down federal stimulus cash from her agency amid a growing backlash against schools with multibillion-dollar endowments getting a slice of the $2 trillion rescue package.

“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 on Wednesday. “It’s also important for Congress to change the law to make sure no more taxpayer funds go to elite, wealthy institutions."

Stanford University on Wednesday announced that it would reject more than $7 million in stimulus funds, saying it wanted to help keep smaller schools in business. DeVos praised the decision and encouraged other wealthy schools to follow Stanford’s lead.

Harvard University said on Wednesday that it is undecided about whether to take $8.7 million of stimulus funding, which President Donald Trump sharply criticized on Tuesday. If the university does take the money, a spokesperson said, the school would use the money exclusively for student financial assistance.

At least two Senate Republicans — Sens. Ted Cruz of Texas and Martha McSally of Arizona — called on Harvard to forfeit its share of the stimulus funding.

Treasury Secretary Steve Mnuchin said 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.

DeVos said in her statement that “wealthy institutions that do not primarily serve low-income students do not need or deserve additional taxpayer funds. This is common sense.”

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.

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 individual associated with the department told POLITICO on Wednesday.

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 funding.

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.