Princeton University Says It Won’t Take Federal Stimulus Money

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(Bloomberg) --

Princeton University said it won’t accept funding from the federal government to help colleges that have been hurt by economic impact of the coronavirus pandemic.

The $2 trillion stimulus provided about $12.5 billion in direct aid for all colleges determined by a formula that also allocates money to the wealthiest U.S. colleges, including Princeton, with an endowment of $26.1 billion as of June.

“Princeton, which did not request these funds, has examined whether it could use them in a manner consistent with congressional intent and guidance provided by the Department of Education,” spokesman Ben Chang said Wednesday in a statement. “We have also taken steps to meet additional needs resulting from Covid-19, and will continue to look for opportunities to do so throughout this crisis.”

The money has become controversial for the richest schools. President Donald Trump has criticized the allocation for Harvard University. Secretary of Education Betsy DeVos in a statement Wednesday said “wealthy institutions that do not primarily serve low-income students do not need or deserve additional taxpayer funds” and urged Congress to change the law so it doesn’t favor “elite” institutions.

Stanford University, with $27.7 billion as of June, also said it wouldn’t take the money. The school asked officials this week to rescind its application for relief funds, it said in a statement earlier Wednesday.

The schools with the largest endowments are among the most generous with financial aid, offering grants that don’t need to be paid back. Many of the same schools are also paying for the first time an endowment tax, passed as part of the December 2017 overhaul.

Princeton’s allocation was determined to be about $2.4 million, according to federal data.

“Our no-loan financial aid packages and other programs are designed to provide exceptional levels of support to our students, including DACA beneficiaries and international students,” Chang said. “We remain committed to providing this support.”

Under the stimulus plan, the federal money will be distributed based on a formula of schools’ low-income population, who receive Pell Grants, as well as the total number of students who do not get the aid.

©2020 Bloomberg L.P.

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