After Trump’s rebuke, Harvard won’t take federal relief money

Harvard said it won't take money from the federal government's taxpayer-funded relief program.Blake Nissen for The Boston Globe/File 2020

After being publicly scolded by President Trump and facing a growing backlash over its access to federal stimulus funds, Harvard University on Wednesday announced it would not apply for the emergency relief.

Harvard joined at least two other elite universities, Stanford and Princeton, in opting out of the stimulus money.

In a statement, Harvard said it was concerned “that the intense focus by politicians and others on Harvard in connection with this program may undermine participation in a relief effort that Congress created and the President signed into law for the purpose of helping students and institutions whose financial challenges in the coming months may be most severe.

"As a result of this, and the evolving guidance being issued around use of the Higher Education Emergency Relief Fund, Harvard has decided not to seek or accept the funds allocated to it by statute.”

Harvard, with a $41 billion endowment, has borne the brunt of criticism over the use of taxpayer money to help wealthy schools cope with the financial toll of the coronavirus.

The pandemic has exacerbated financial problems at many colleges and universities and served to further divide the haves and have-nots in higher education.

On Wednesday, Harvard said it hoped the federal funds allocated for its campus would go to needier institutions in Massachusetts.

“We hope that special consideration will be given to Massachusetts institutions that are struggling to serve their communities and meet the needs of their students through these difficult and challenging times,” the university said in a statement.

Yet, it was unclear whether the decisions by these elite schools to forgo federal stimulus funds would mean a fairer distribution of the relief money.

The funds will simply be redistributed to other wealthy private colleges that decided to apply for them, said Ben Miller, of the left-leaning Center for American Progress, who has been studying the formula used to divide the money.

“Instead of giving into presidential demagoguery, wealthy colleges should accept the money and then make an equivalent donation of the same amount to a poorer institution in their area,” Miller said. "This will almost certainly be a more equitable investment than using the federal formula."

When Congress approved the $14 billion fund to help colleges offset the financial toll of the pandemic, it developed a formula for distributing the money based on the number of full-time equivalent students and the number of low-income students an institution serves. The money is meant to help low-income students, in particular.

The formula benefits large universities, and among higher education experts there has been a growing concern that community colleges and institutions with more part-time, working students wouldn’t get enough help.

Arizona State University is set to receive the most money, $63.5 million.

The University of Massachusetts Amherst will get $18 million, and the public university system’s Boston campus will get $12 million. Bridgewater State University has been allocated $8.8 million, and Bunker Hill Community College received $8.3 million, about as much as Harvard.

Barber academies and beauty schools also qualified for stimulus funds.

The formula was developed in a rush and designed so that schools and students could get money quickly instead of having to apply for grants, said Terry Hartle, a senior vice president at the American Council on Education, a lobbying group.

“We think this is a good formula; we think this is a reasonable way to distribute the funds,” Hartle said.

Lawmakers should not have been surprised that Harvard or any of the other elite universities qualified for emergency relief, since they also educate low-income students, Hartle said.

“This is another aspect of the culture wars that Harvard got caught up in,” Hartle said.

The battle reached a fevered pitch on Tuesday when President Trump lashed out at Harvard, the world’s wealthiest higher-education institution, for tapping into the emergency money.

During a White House briefing on the pandemic, he said he’d personally ask Harvard to return the $8.6 million it was set to receive.

“They shouldn’t be taking it,” Trump said of Harvard. "They have one of the largest endowments anywhere in the country, maybe in the world, I guess. And they’re going to pay back that money.”

At the time, the president appeared to be referring to money allocated to helping small businesses. Harvard did not apply for or receive any money tied to the program to assist small businesses.

But by Wednesday morning, Treasury Secretary Steven Mnuchin said he had spoken with Harvard president Lawrence Bacow, and the university said it was reconsidering applying for the relief funds.

Stanford University, meanwhile, rescinded its application. The university was set to receive $7.4 million. In a statement, Stanford said it was facing “significant financial pressures” but the money could be better used to help smaller institutions. Stanford has an endowment of $28 billion.

“We realize that this crisis represents an existential threat for many of the smaller colleges and universities that are such a critical fabric of higher learning in the United States,” Stanford said. “We believe strongly in the importance of keeping these institutions viable in order to provide access to higher education for as many students as possible, and we had concluded that this should be a priority.”

The pandemic has put tuition-reliant institutions that serve low-income, first-generation students at particular risk. They’ve already lost money, and the fall semester is uncertain. These colleges and universities generally don’t have large endowments that can help cushion a financial blow.

For example, Pine Manor College in Chestnut Hill announced earlier this month that it may not have enough money to reopen in the fall. The college, which enrolls 360 students, three-quarters of whom are considered low-income, received $519,000 in stimulus funds.

In Vermont, the chancellor of the state college system had proposed closing three of the five residential campuses before withdrawing the proposal on Wednesday after a backlash from students, faculty, and lawmakers. Still, the system anticipates losing $10 million this fiscal year because of the pandemic and needs another $25 million to stay afloat next year. The system is slated to receive about $6.2 million in higher education stimulus funds.

Jeb Spaulding, chancellor of the Vermont system, said in a statement that he will work with the public and state legislators to come up with alternatives. But he cautioned that the system would not continue to operate as is for much longer.