At his news briefing this afternoon, President Trump said that Harvard would have to return the $9 million it is slated to receive in federal stimulus money. “Harvard’s going to pay back the money,” he said. “They shouldn’t be taking it. When I saw Harvard—they have one of the largest endowments anywhere in the country, maybe the world. They’re going to pay back the money.”
The President stepped up to the podium after Treasury Secretary Mnuchin was asked whether large companies that received so-called “PPP” money intended for small businesses should be required to return those funds to the federal government. As Forbes reported yesterday, at least 71 publicly traded companies collected cash under the paycheck protection act. The $349 billion intended for small companies was quickly drained when banks favored loan applicants with whom they had strong relationships. Millions of small companies were denied access to the loans.
But the President was clearly confused this afternoon. Harvard is not drawing from the provision of the $2.2 trillion stimulus bill intended to help small businesses. Instead its money is coming from the $12.5 billion earmarked for institutions of higher education.
That money is being distributed according to a formula that has nothing to do with a school’s financial health or endowment. It is based on enrollment and it favors schools with large numbers of students who receive Pell grants that help students from low- and moderate-income families. Sixteen percent of Harvard’s 24,000 students receive the grants. Harvard is slated to receive $9 million. The law requires it to give half that amount to students whose expenses have increased because of the coronavirus pandemic.
Harvard has been under fire for taking federal funds when it has the largest endowment of any school in the U.S. Last year the endowment was worth $41 billion. Yesterday Harvard announced that it would give the entire $9 million to students who have experienced financial hardship because of the pandemic.
For more on why Harvard is collecting the stimulus money, read this post.