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Shalina Chatlani
Education Dive
Elite colleges rejected coronavirus aid. How will the Ed Dept reallocate it?
While federal officials pressured wealthy institutions to turn down
their shares of CARES funding, they haven’t come up with a way yet to
get the money to schools that need it.
Jeremy Bauer-Wolf
April 30, 2020
President Donald Trump last week railed against Harvard University,
claiming he would personally ensure the institution, with the largest
endowment in the U.S., would turn away millions of dollars in federal
coronavirus aid it was due. Education Secretary Betsy DeVos followed
suit soon after, publicly urging affluent colleges to reject money from
the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The political pressure worked.
At least seven elite colleges and Strategic Education Inc., the parent
company of the for-profit Strayer and Capella universities, turned down
the relief. Their shares represent less than half a percent of the
$12.6 billion in funding for colleges, but the moves meant more than
$56 million would go unclaimed, half of which was statutorily mandated
to be passed to students as emergency grants.
Many institutions that decided not to take CARES funding, among them
Stanford, Yale and Princeton universities, instead pledged they would
use their own funds to help students. But the situation has left the
rejected money in limbo with no immediate avenue for the U.S.
Department of Education to redistribute it.
Congress constructed the law so colleges get a cut of the aid based on
their count of full-time students, weighted heavily toward how many
receive federal Pell Grants.
Lawmakers, however, did not develop a contingency for colleges that
declined the funding. Nor did the Education Department have a plan in
place for redirecting the money.
The department said it is moving as quickly as possible to disburse the
funds, but it is still assessing its options on how to reallocate the
money institutions have said they won’t take. Observers, however, are
skeptical about its ability to do so expeditiously.
Some institutions that declined CARES money indicated they’d like the
department to give it to struggling colleges located close to them.
Two-year colleges, which are typically more cash-strapped than their
four-year counterparts, haven’t benefited as much from the relief in
part because a high number of low-income students pursue community
college on a part-time basis.
DeVos also called on colleges that determined they had little need for the funding to donate it to their beleaguered neighbors.
But some observers predict that with the murkiness in the law and in
the department’s guidance, the money may remain untouched at a critical
time for suffering colleges. A lowball estimate by the American Council
on Education (ACE) is that the sector stands to lose nearly $47 billion.
Given that the administration encouraged well-off schools to give up
the funding, "one would have thought that a mechanism for distributing
the money to colleges that serve the most needy students would have
been developed," said David Baime, senior vice president for government
relations and policy analysis at the American Association of Community
Colleges (AACC).
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