Yahoo reports Harvard University, already supported by a massive $41 billion endowment, is getting nearly $9 million in taxpayer aid from the federal Coronavirus Aid, Relief and Economic Security Act, the U.S. Department of Education announced.
Under the terms of the payout from CARES’ Higher Education Emergency Relief Fund, at least half of the $8.7 million earmarked for Harvard must be reserved for emergency financial grants to students, according to the Harvard Crimson, which was the first to report the aid.
But at least some of that money — which could be used to cover tuition payments and course materials — would also end up in Harvard coffers. The funds would also likely be spent on extra technology, food and housing costs that students incurred amid “disruptions in their education” due to COVID-19, according to CARES provisions.
Though Education Secretary Betsy DeVos hailed the program in a statement earlier this month, a spokesperson later told Newsweek that DeVos “shares the concern that sending millions to schools with significant endowments is a poor use of taxpayer money.”
The money is part of nearly $14 billion in the $2 trillion CARES package allocated for higher education institutions and students as colleges and universities across the nation have shut classrooms and launched online learning.
Aid amounts for universities and colleges were based on a formula set by Congress weighted heavily in favor of institutions with significant proportions of low-income students on federally funded Pell grants. The formula apparently does not take into account the financial need of an institution.
Even with the aid, several smaller, financially struggling colleges may be forced to close permanently, Bloomberg reported.
Institutions like Harvard might have to dip into their endowments — a pool of assets and investments — or step up fundraising to cover costs. Harvard’s endowment is the largest of any university in the world, but is at risk of losing value amid the economic collapse caused by the COVID-19 crisis.
In addition to its endowment, Harvard ended the 2019 fiscal year with a nearly $300 million operating surplus, according to Newsweek.
Harvard has already announced salary and hiring freezes, cost cuts, and deferred capital projects as the COVID-19 crisis depresses its income, the Crimson reported. Harvard came under fire in March for firing subcontracted cafeteria workers and offering no unemployment benefits, according to the Washington Free Beacon. It also gave students in university housing just days to get out.
The university sold a $1.1 billion bond for additional funds early this month to take advantage of plunging interest rates, Bloomberg reported.