Harvard, Yale to Decline Federal Stimulus Money for Covid Costs
(Bloomberg) -- Some of the richest U.S. colleges are declining another round of stimulus money that would offset the financial impact of the Covid-19 pandemic on schools.
Harvard, Princeton, Yale, Amherst and Bowdoin are telling the U.S. Department of Education they will not accept a third round of aid allocated by Congress, according to officials at the schools.
Lawmakers set aside billions of dollars in emergency relief to help schools contend with expenses from the coronavirus-induced shutdown and offset the sharp drop in revenue and jump in other costs such as testing. But in April 2020 the aid sparked the ire of President Donald Trump, who attacked Harvard for what it would have been given. Harvard and other universities turned down the funds.
The result: Some schools, especially those with hefty endowments, refused money they were entitled to -- and are continuing to do so. That’s astute public relations, said Brian Galle, a professor of law at Georgetown University and expert on taxation.
“It’s smart not to take the money because it would look unsympathetic to be rich and taking it,” Galle said.
Yale University has declined the $17.4 million allotted to the school under the Higher Education Emergency Relief Fund.
“The university did so with the expectation that the funds would be reallocated to other colleges and universities, ideally among institutions in Connecticut,” said Karen Peart, a spokesperson for the school, in New Haven.
Over the three rounds of aid, Yale was eligible to receive $28.9 million. It only accepted $4.7 million, which Yale gave to students with exceptional financial need, including those studying nursing and public health “whose training is critical to the health and safety of our communities,” said Peart.
There’s another reason schools may be passing on the cash. The wealthiest colleges are expected to report strong results for their fiscal 2021 endowments.
The median return for U.S. college endowments was 27% for the 12 months ended June 30, the highest since 1986, according to data from Wilshire Trust Universe Comparison Service. The largest funds with assets of at least $500 million had a median gain of 34%.
Schools likely “had an eye out for how it would look if it turned out they’d had one of their best years ever and had their hand out,” said Galle of Georgetown.
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