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After receiving backlash for the nearly $9 million in funding it netted under the Coronavirus Aid, Relief, and Economic Security Act, Harvard will allocate the sum to student financial assistance.
Numerous members of Congress — including Sen. Ted Cruz (R-Texas), Sen. Josh Hawley (R-Mo.), Sen. Rick Scott (R-Fla.), Rep. Mark Green (R-Tenn.), and Rep. Thomas Massie (R-Ky.) — expressed outrage on Twitter that Harvard would be receiving federal assistance.
All five members of Congress cited the size of the University’s endowment in their tweets.
“This is ridiculous. Taxpayer relief funds should go to those in real need. Harvard University has a $41bn endowment—the largest in the world. Put another way, Harvard’s endowment is $13mm per student, or $171mm per faculty member,” Cruz wrote on Sunday.
Harvard’s endowment — the largest of any University in the world — was last valued in June 2019 at $40.9 billion.
However, top administrators have said its value has declined as a consequence of the pandemic. Vice President for Finance and Chief Financial Officer Thomas J. Hollister cited an estimate placing the value of the endowment in the “mid 30-billion range” in an interview with The Crimson last week.
Cruz and Scott both voted for the CARES Act, which passed the Senate 96-0 on March 25. It passed the House by a voice vote and was signed into law by President Donald J. Trump on March 27.
University spokesperson Jason A. Newton wrote in an emailed statement Monday that Harvard will not be using any of the funds it is set to receive from the CARES Act to cover institutional costs.
“By federal formula laid out in the CARES Act, Harvard was allocated $8.6 million, with 50% of those funds to be reserved for grants to students,” Newton wrote. “Harvard is actually allocating 100% of the funds to financial assistance for students to meet their urgent needs in the face of this pandemic.”
Newton wrote Harvard will distribute the funds “based on student financial need.”
The Department of Education used a formula laid out in the legislation to allocate the funds among thousands of American institutions of higher education. The formula took two factors into account: the proportion of students who receive federal Pell Grants, which was weighted 75 percent, and total graduate and undergraduate enrollment, which was weighted 25 percent.
According to Newton, 16 percent of Harvard’s 6,500 undergraduates are Pell Grant recipients, and 55 percent of students at the College receive some form of financial aid.
“This financial assistance will be on top of the significant support the University has already provided to students – including assistance with travel, providing direct aid for living expenses to those with need, and supporting students’ transition to online education,” Newton wrote.
Hawley wrote that Universities should have to spend down their endowments before they are given federal aid.
“Universities with billions & billions stashed away in endowments should get no taxpayer money until they have tapped those endowments,” Hawley wrote on Twitter on Monday. Hawley added that it was “obscene” that Harvard will receive a “bailout” from the CARES Act.
Yale University, which received nearly $7 million in aid, boasts a $30.3 billion endowment. Stanford University received around $7.4 million from the stimulus package and maintains a $27.7 billion endowment.
Cruz called on Harvard to give its funding back to the federal government.
“Dear Harvard: Thank you for my law degree and an excellent legal education. You’re very rich; many people are hurting. Now give the money back,” he wrote on Twitter on Monday.
Green and Scott, meanwhile, wrote that the funds should have been allocated to small businesses.
The Small Business Administration announced on Thursday that the $349 billion earmarked in the CARES Act for its Paycheck Protection Program had been depleted. Legislators are working on a deal to allocate more funds to the program.
“Millions have lost their job. Small businesses are suffering & trying to stay alive. Meanwhile, Harvard, with its $40B endowment, just got $9M in taxpayer money,” Scott wrote on Twitter.
“That funding should have gone to small businesses, every cent of it,” Green wrote.
Some large businesses, such as Shake Shack, have returned federal aid money in response to similar criticisms that federal stimulus programs favored major corporations. Shake Shack gained the necessary funding to make up for its coronavirus losses through an equity transaction and returned its $10 million loan, per a statement posted to its website on Sunday.
The funds Harvard received, however, came from a different section of the CARES Act than the funding for small businesses, and were allocated through the Department of Education, not the Small Business Administration.
“Within the $2 trillion CARES Act, Congress set aside $14 billion in the Higher Education Emergency Relief Fund to address student needs, as well as impacts of the COVID-19 pandemic on colleges and universities,” Newton wrote.
Some criticism of the funding came from within Harvard itself. Eric Feigl-Ding, an epidemiologist at the Harvard School of Public Health, wrote on Twitter that Harvard “doesn’t need” the funds, also citing the size of its endowment.
“This $9 million should goto small businesses and out of work people,” Feigl-Ding wrote. “C’mon @Harvard , do the right thing & donate it to the community. People are suffering!”
On April 7, Harvard announced it donated $250,000 to the City of Cambridge to support a temporary homeless shelter.
Donald J. Trump Jr. — son of President Donald J. Trump and Executive Vice President of Development and Acquisitions for The Trump Organization — also took to Twitter to criticize the allocation. He cited the January arrest of former Chemistry department chair Charles M. Lieber on charges that he failed to disclose research funding from the Chinese government.
“So rather than going to a small business that actually needs the money, Harvard, with a $40 billion endowment and professors that keep getting arrested for giving research secrets to the Chinese Government takes $9,000,000 they don’t need so a small business can’t. What a joke!” Trump Jr. wrote.
Massie, a vocal critic of the CARES Act, also cited Lieber in his criticisms of Harvard’s funding allocation, as well as the University’s response to the COVID-19 crisis more broadly.
“Harvard has billions in their endowment, kicked students off campus this semester, harbored a researcher (chair of chemical biology department!) who, according to DOJ, failed to disclose payments from the Chinese govt,” Massie wrote on Twitter. “So why did my colleagues include them in this bailout?”
In a press conference Monday evening, a reporter asked Trump whether it was “fair” that corporations like Ruth’s Chris Steak House and Harvard “got a lot of money” from the CARES Act. The reporter stated that the funding was intended for small businesses, but the funds Harvard received were from the Higher Education Emergency Relief Fund.
“Well I know one thing, I didn’t get any, that’s for sure,” Trump said. “I didn’t get any.”
“Some people will have to return it, if we think it’s inappropriate,” Trump said. “If somebody got something that we think is inappropriate we will get it back.”
—Staff writer Ellen M. Burstein can be reached at ellen.burstein@thecrimson.com. Follow her on Twitter @ellenburstein.
—Staff writer Camille G. Caldera can be reached at camille.caldera@thecrimson.com. Follow her on Twitter @camille_caldera.
