WASHINGTON – President Donald Trump implied this week that Harvard University had taken coronavirus stimulus funds intended for small businesses and then argued that the school "shouldn't be taking" funds approved by Congress during the health crisis.
The assertion came as Washington scrambles to refund the Paycheck Protection Program, a $349 billion small business loan effort signed into law March 27 that ran out of money within weeks as state stay-at-home orders shuttered businesses.
Treasury Secretary Steve Mnuchin, a Yale graduate, later acknowledged that Harvard did not, in fact, receive money from the small businesses program. But he signaled the school, because of its large endowment, should nevertheless return funding.
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Harvard announced Wednesday that it would not accept coronavirus stimulus money, citing the political controversy that followed the president's statements.
So did one of America's most prestigious universities pull a fast one?
Claim: Did Harvard take money intended for small businesses?
Trump was clear in his claim. Responding to a question about larger businesses such as Shake Shack that received the small business money, Trump interjected to indicate that Harvard's case was especially outrageous. At first Trump said that the university would return the money, and he then said that he intended to pressure the school to do so.
"Harvard is going to pay back the money. And they shouldn't be taking it," Trump said Tuesday, an assertion that aides echoed via official White House social media accounts later in the day. "And they're going to pay back that money."
Speaking the next morning on Fox Business, Mnuchin clarified that Harvard did not take money intended for small businesses. Rather, he said, the university was awarded funding through a Department of Education program intended to help universities. Mnuchin continued to suggest the school should return funding.
Noting Harvard's considerable endowment – measured in the tens of billions of dollars – he questioned why the school would need any government stimulus funds in the first place.
"Harvard is part of the $30 billion program of Department of Education money," he said. "And I think Harvard is thinking seriously about whether it's appropriate for them to keep the money or give it to other institutions that need it."
What’s really happening?
Harvard was due to receive money under a higher education emergency relief fund created by the CARES Act, the stimulus Trump signed into law in March. That provision provides money to universities and colleges on a formula, based in part on what share of its students are eligible for federal financial aid through the Pell Grant program.
The Department of Education announced Harvard would be eligible for about $8.6 million. That wasn't money the school applied for but rather was the amount available under the formula. Hundreds of other schools were also eligible, such as the University of Alabama, due more than $20 million, San Diego State University, which was awarded $29 million, and Arizona State University, set to receive nearly $64 million.
Neither Trump nor Mnuchin discussed the other schools. Secretary of Education Betsy DeVos, on the other hand, had long suggested that "wealthy" schools should not accept the money – even though the legislation Trump signed into law allowed them to. DeVos did not define how a school could determine whether it met the threshold for "wealthy."
"Congress required by law that taxpayer Emergency Relief funds be given to all colleges and universities, no matter their wealth," DeVos said Wednesday. "But as I’ve said all along, wealthy institutions that do not primarily serve low-income students do not need or deserve additional taxpayer funds."
The law, which did not distinguish between schools with large or small endowments, requires schools to use half of the money for emergency aid grants to students who may be struggling because of the virus and allows them to use the other half for institutional costs to pay for changes to the delivery of instruction. Harvard had previously announced it would use 100% of its funding for students.
Not only had Harvard not applied for the federal money, but the university said in a statement Wednesday that it had never accessed any of the funds to begin with. In other words, there was no federal money for the university to return.
The Treasury Department did not respond to a request for comment.
"We have previously said that Harvard, like other institutions, will face significant financial challenges due to the pandemic and economic crisis it has caused," Harvard said in a statement Wednesday announcing it would not take part in the program.
"We are also concerned however, 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," the statement read.
Universities already receive billions in money from the federal government in the form of student aid and research grants. In the 2018-19 academic year alone, the government issued roughly $28 billion in federal Pell Grants, money reserved for students from low-income families, to 6.8 million students at rich and poor institutions across the country. About 17% of Harvard’s undergraduate class qualify for these grants.
Other high-profile universities, including Stanford and Princeton, said Wednesday they would not accept the money.
Our ruling: False
We rate this claim false. First, the money at issue had nothing to do with the Paycheck Protection Program for small businesses. It was, instead, a separate program for universities and colleges. Second, whether well off universities such as Harvard should receive federal stimulus money is a matter for debate. But the bipartisan law passed by Congress and signed by Trump allowed universities to access the funding. In Harvard's case, the university never took the funding and, because of the controversy, has now said it will not do so. Meanwhile, the Trump administration has never defined which universities it feels are wealthy enough to abandon money partly intended for students.
Our fact-check sources
♦ Congress.gov, bill text for the CARES act, the coronavirus stimulus.
♦ Department of Education, allocations to colleges and universities.
♦ Department of Education, statement from Secretary Betsy DeVos.
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