This article has been updated to reflect Harvard’s announcement that it will not be accepting any bailout funds as part of the $2 trillion CARES Act.
Despite having a $40 billion endowment, Harvard University was given almost $9 million in coronavirus relief aid from the CARES Act – and now they’re giving it back.
The government mandated that half the money be reserved for emergency financial aid grants for students, but critics wondered why an institution with Harvard’s financial backing needed a bailout.
After an uproar over big businesses receiving millions, while small businesses were left in the dust, restaurant giant Shake Shack gave back the $10 million it received from the Paycheck Protection Program (PPP).
U.S. President Donald Trump said Tuesday Harvard should do the same and stated the Ivy League heavyweight would do so.
“Harvard is going to pay back the money and they shouldn’t be taking it,” Trump said during a press conference. He called Harvard’s endowment one of the biggest “in the country, maybe in the world.” He doubled down on the statements on Twitter and threatened consequences if Harvard didn’t concede and return the money.
This led Harvard to clarify it didn’t receive funding from PPP, but rather under the educational funding included in the bill.
”Harvard did not apply for, nor has it received any funds through the U.S. Small Business Administration’s Paycheck Protection Program for small businesses. Reports saying otherwise are inaccurate,” the school said. “President Trump is right that it would not have been appropriate for our institution to receive funds that were designated for struggling small businesses.”
Harvard administration iinitially dug in their heels, saying they will not heed Trump’s call to return the aid, but rather “ direct 100% of the funds to financial assistance to students, and will not be using any of the funds to cover institutional costs,” The Guardian reported.
However, after immense pressure, Harvard University announced Wednesday it will not be accepting any bailout funds as part of the $2 trillion CARES Act, ABC News reported.
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In spite of its perceived wealth, Harvard could face a “grave” financial situation due to the COVID-19 outbreak, experts said.
“Financial markets are reflecting a very big macroeconomic shock,” said Darrell Duffie, a professor at Stanford University’s Graduate School of Business. “What was $40 billion is going to be a lot less by the time the devaluations are marked into it.”
Despite these claims, critics abound over Harvard’s initial decision to keep the money. The university has also been criticized in the past for failing to divest from all industries that support prisons and its refusal to pay reparations for slavery.
