A pedestrian in a protective mask is reflected in the window of a Harvard University store in ... [+]
Harvard University received nearly $9 million in funding under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, despite having the largest endowment of any university in the world, valued at $40.9 billion as of June 2019.
The move sparked outrage among many. “Why is Harvard, with its multi-billion dollar endowment, much of it built with help from taxpayer money, getting a bailout? This is obscene,” Sen. Josh Hawley (R-Mo.) wrote on Twitter.
“Taxpayer relief funds should go to those in real need. Harvard University has a $41bn endowment—the largest in the world. Put another way, Harvard’s endowment is $13mm per student, or $171mm per faculty member,” Sen. Ted Cruz (R-Texas) posted on Twitter.
Later, Cruz added: “Dear Harvard: Thank you for my law degree and an excellent legal education. You’re very rich; many people are hurting. Now give the money back.”
Facing backlash, Harvard announced that it plans to allocate 100 percent of funds to student financial assistance. The CARES Act directed that 50% of funds received should be used by the university as direct financial assistance grants to students, and 50% can be used to cover COVID-19-incurred financial costs. Harvard stated that it does not plan to use any of the funds to cover institutional costs.
“Harvard is actually allocating 100% of the funds to financial assistance for students to meet their urgent needs in the face of this pandemic,” Jason Newton, associate director of Harvard’s media relations, wrote in an emailed statement.
“Harvard will allocate the funds based on student financial need,” Newton added.
To be sure, the $2 trillion CARES Act included $14 billion in its Higher Education Emergency Relief Fund, which is separate from the Payroll Protection Program administered through the Small Business Administration through local banks. This law allocated funds to all colleges that participate in the federal student aid programs. Relief packages were determined through a funding formula based largely on the number of students at an institution receiving federal financial aid through Pell Grants and the overall institutional student enrollment.
"What's best for students is at the center of every decision we make," U.S. Secretary of Education Betsy DeVos said in a statement about the program earlier this month. "That's why we prioritized getting funding out the door quickly to college students who need it most. We don't want unmet financial needs due to the coronavirus to derail their learning."
Later, a spokesperson for the U.S. Department of Education told Newsweek that DeVos shares the concern that sending millions to schools with significant endowments is a poor use of taxpayer money. “In her letter to college and university presidents, 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 spokesperson said.
Large fund packages were given to schools such as Arizona State University ($63.5 million), Rutgers University ($54 million) and Ohio State University ($42.8 million). Other schools that received big funding: San Diego State University ($29 million), San Francisco State University ($28 million) and New York University ($25 million).
Among Ivy League schools, Columbia received nearly $13 million. University of Pennsylvania received almost $10 million, and Yale—which has the second largest endowment of colleges and universities in the U.S. at almost $25.5 billion—received nearly $7 million.
Harvard’s endowment distributed $1.9 billion at the end of the fiscal year in June 2019, contributing to more than a third of the university’s total operating revenue that year.
During the COVID-19 situation, Harvard provided financial assistance to students as they moved off campus and assisted with travel, moving and storage costs. The university guaranteed pay and benefits through the end of May for its employees whose jobs have been displaced and contract workers. It also provided $250,000 to Cambridge to support a temporary homeless shelter and allocated the Harvard Square Hotel as housing for first responders.
