Institutions of higher education across the United States were allotted $14 billion in federal aid under the CARES Act, a bill created to address the harsh economic impact of the novel coronavirus on the country.
President Donald Trump criticized Harvard University in Massachusetts for getting about $8.7 million in aid even though the university has a $40.9 billion endowment, saying that he wants Harvard to “give it back.”
The formula for the allocation of funds to institutions of higher education was created by Congress with the requisite that “at least 50 percent must be reserved to provide students with emergency financial aid grants to help cover expenses related to the disruption of campus operations due to coronavirus,” according to a letter from Education Secretary Betsy DeVos to university presidents supplied by the Department of Education to Newsweek.
“Secretary DeVos asked them to determine if their institutions actually need the money and, if not, to send unneeded CARES Act funds to schools in need in their state or region. We hope that the presidents of these schools will take the Secretary’s advice and direct CARES Act funds to students in need, no matter where those students are enrolled,” the DOE spokesperson said.
Harvard told Newsweek in an email Monday that “100 percent of the funds [will go] to financial assistance for students to meet their urgent needs in the face of this pandemic.”
“Harvard will allocate the funds based on student financial need. This financial assistance will be on top of the significant support the University has already provided to students – including assistance with travel, providing direct aid for living expenses to those with need, and supporting students’ transition to online education,” the spokesperson said.
A Harvard spokesperson told Newsweek in another email Wednesday that it “has decided not to seek or accept the funds allocated to it by statute.”
“We will inform the Department of Education of our decision and encourage the department to act swiftly to reallocate resources previously allocated to Harvard. 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 remains fully committed to providing the financial support that it has promised to its students,” the email stated.
Harvard has by far the biggest endowment of any private school in the country. Here is a list of the top five endowments for private universities that are set to receive millions in federal aid.
Yale University (CT)
Endowment: $30.3 Billion
Federal Aid: $6,851,139
Yale University is set to receive $6.8 million in federal aid while there endowment “value increased from $29.4 billion on June 30, 2018, to $30.3 billion on June 30, 2019,” according to a report by Yale News.
“Approximately a quarter of spending from the endowment is specified by donors to support professorships and teaching. Nearly a fifth is dedicated to scholarships, fellowships, and prizes. A quarter is available for general university purposes. The remaining endowment funds are donor-designated to support specific departments or programs,” the report states.
Stanford University (CA)
Endowment: $27.7 billion
Federal Aid: $7,376,668
Stanford University in California has $27.7 billion in its endowment fund and was set to receive $7.3 million in federal aid. However, a Stanford spokesperson told Newsweek in an email that they asked the DOE to rescind their application for federal aid.
“Like all universities, Stanford is facing significant financial pressures during this time of unprecedented uncertainty. The combination of lost revenue, increased costs, and a market downturn that could have a substantial impact on our endowment are all expected to negatively affect the university’s finances for some time to come,” the spokesperson said.
“However, 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 States. 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.”
“Since half of these funds were to be directly applied to grants for students, we want to reassure our students that we remain fully committed to the financial aid that has been promised to them,” the spokesperson added.
Endowment: $26.1 billion
Federal Aid: $2,424,099
Princeton University in New Jersey has an endowment fund of $26.1 billion and was set to receive $2.4 million in federal relief aid. However, the university’s Twitter account posted a lengthy thread stating: “Princeton University has determined it will not accept funding allocated under the CARES Act. Princeton has not yet received any of these funds, and never requested any of these funds.”
“We have also taken steps to meet additional needs resulting from #COVID19, and will continue to look for opportunities to do so throughout this crisis,” the thread states.
Massachusetts Institute of Technology (MA)
Endowment: $17.4 billion
Federal Aid: $5,045,387
The Massachusetts Institute of Technology, or MIT, will receive $5 million in federal aid despite having an endowment fund of $17.4 billion. A report by the MIT news office indicated that the funds are used for “Institute activities including education, research, campus renewal, faculty work, and student financial aid.”
“MIT works closely with all families who qualify for financial aid to develop an individual affordability plan tailored to their financial circumstances. In 2018-19, the average MIT scholarship was $47,593. 59 percent of MIT undergraduates received need-based financial aid, and 36 percent of MIT undergraduate students received scholarship funding from MIT and other sources sufficient to cover the total cost of tuition,” the report states.
Newsweek reached out to all of the financial institutions named in the article and inquired as to whether they could ask donors to release restrictions on funds equal to the same amount of the federal government aid, and has yet to hear back from Yale or MIT.
Update 4/22/20, 4:03 p.m. EDT: The article was updated to include new statements from Harvard and Princeton stating that the schools will not be accepting federal aid from the CARES Act.