Harvard Says It Didn’t Get Small Business Aid After Trump Threat

(Bloomberg) -- Harvard University denied Tuesday that it applied for or received funding through the Paycheck Protection Program for small businesses grappling with the coronavirus crisis, after President Donald Trump told reporters at the White House he planned to force the school to pay back federal assistance.

“President Trump is right that it would not have been appropriate for our institution to receive funds that were designated for struggling small businesses,” the university said in a statement Tuesday.

Treasury Secretary Steven Mnuchin said Tuesday that the program wasn’t intended for publicly traded companies that had other ways to access funding, and that his department would be issuing guidelines soon in an effort to get those corporations to give back the forgivable loans to the federal government.

The Shake Shack Inc. burger chain said earlier this week it planned to return a $10 million loan it received through the program amid public outrage that the package benefited chain restaurants and hotels rather than local businesses.

As Mnuchin was discussing the effort, Trump interjected to say Harvard will also “pay back the money.”

“They shouldn’t be taking it,” Trump said. “When I saw Harvard -- one of the largest endowments anywhere in the country, maybe the world, and they are going to pay back that money.”

The university -- which had an endowment valued at $40.9 billion as of June -- said it had received funding under a separate $14 billion program targeted at higher education institutions in the $2.2 trillion relief package passed by Congress late last month. That program grants universities assistance based on a formula that looks at overall enrollment and the number of students receiving federal financial aid, and at least half the funding must be provided directly to students affected by the coronavirus.

“Like most colleges and universities, Harvard has been allocated funds as part of the CARES Act Higher Education Emergency Relief Fund,” Harvard said in a statement. “Harvard has committed that 100% of these emergency higher education funds will be used to provide direct assistance to students facing urgent financial needs due to the Covid-19 pandemic.”

Harvard says it would give the all the $8.6 million it received directly to students, despite being eligible to spend half that on its institutional costs related to the virus. Other top-tier and highly-endowed universities also received funding under the program. Yale University was allocated $6.8 million, the University of Chicago got $6.2 million, and Stanford University took nearly $7.4 million in federal assistance.

Late Tuesday evening, Trump posted on Twitter that Harvard should “give back the money now.” He did not say if he meant the $8.6 million.

“Their whole ‘endowment’ system should be looked at,” the president added.

The White House earlier Tuesday declined to comment on whether the administration would still seek to claw back Harvard’s grant under the legislation.

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