In yesterday’s press conference, President Donald Trump said that Harvard University “is going to pay back the money and they shouldn’t be taking it.” Harvard however says that it intends to keep the money. That will set off an interesting legal fight, which could ultimately cost much of the grant’s worth in legal fees. Update: Harvard is now reportedly not going to seek or accept stimulus money.
The $8.6 million grant has received criticism given Harvard’s $41 billion in endowment. However, Harvard announced that it plans “to direct 100% of the funds to financial assistance to students, and will not be using any of the funds to cover institutional costs.”
Harvard correctly points out that this was not really money for small businesses as reported by many reporters. It is money given as part of the educational relief program which was passed as part of the $2.3 trillion stimulus at the end of March. The huge fund for small businesses was also included.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, including a provision included $12.5 billion for roughly 5,000 institutions of higher education. The quickly crafted formula was supposed to favor schools with large numbers of students on federal Pell grants, which go to students from low- and moderate-income families. Pursuant to a a letter from the Secretary of Education, schools have wide discretion in how they distribute the funds.
This aid reflects something that many people do not appreciate. As I have written in the past, universities and colleges are major parts of our economy not just in offering expanding opportunities for students but supporting millions of jobs both directly as employees and indirectly as contractors and suppliers. If we are to stay competitive economically (and solve future pandemics), universities are critical part of such recovery.
The problem that this controversy reveals is that the massive spending in the last two weeks was done virtually on the fly. Trillions are being spent as both parties demand speed rather than care. As a result, there is considerable question on the qualifications and restrictions on such money. There is even greater question how this crippled economy can hope to carry such crushing debt without leaving millions with no future or prospects.
Finally, there will continue to be a controversy over large corporations and institutions receiving stimulus money. However, most universities are non-for-profits and these endowments are largely the result of donations from alumni. For that reason, the comparison is a poor one. That does not mean that all universities and colleges are equal. The question is whether need should be the most important element in determining aid and the size of that aid.
Yet, looking at just need may favor institutions that serve fewer students or play a smaller role in a community. It could also favor for-profit institutions, a structure that some of us have long criticized as inimical to educational programs. In other words, it is more complex than Harvard having a large endowment and a small stimulus check. Harvard does have many students on Pell grants and the money will go to those students. That is what the Department favored as the suggested distribution.
My point is only that the real debate should be on the level of our spending and the danger of poor tracking and conditioning rules. The debate over large corporations getting aid is also worthy of debate but I would not include large non-for-profit educational institutions as part of the danger of windfall payments. I understand if I appear biased as an academic but there are real differences between Costco and Cornell. One is for profit and one is non-for-profit. Cornell is supporting research and students. That fact that Cornell is large means that it has a larger burden in these areas.
Thus, it is always popular to run headlines like “America’s Richest University Grabs Nearly $9 Million In Taxpayer Aid,” on Huffington Post but the problem is not Harvard receiving money due to its Pell grant recipients. The problem is the fact that trillions are being paid out with the most sketchy controls and conditions.
You insult my intelligence by excusing universities and colleges as being critical to not just pandemics, but to such recoveries (for which federal grants have already been given out to solve some of these very same problems, as evidenced by the rapid ramp-up by these universities and colleges in research of the current Covid-19 pandemic.
In fact the higher education being given (yes, given, not earned!) is centered around social justice (how does this contribute to pandemic recovery you know about?) protests against anything “white”, even violent protests, protests over a different point of view, Professors who write instead of teach while receiving royalties & drawing huge salaries on their sabbatical, support and even fan the flames of social discontent.
Ah, come on, give America a break from the damage done by these so-called institutions of higher learning!!
Phi Beta itShayheads
“Harvard announced that it plans “to direct 100% of the funds to financial assistance to students, and will not be using any of the funds to cover institutional costs.”
That is a BS argument and is a stain on Harvard. Money is fungible so its statement is meaningless. Typical of the elites to take food out of the mouths of those that need it most.
This is a problem with a federal government that is so big and so distant from the taxpayer money it spends. This demonstrates the need for a smaller federal government.”
We saw the same with the bailout.
I own a small manufacturing plant. I have 24 employees; got $221k PPP loan. My employees are going to have a job through mid-June for sure. After that, we’ll see.
Now, that works out to $9,200 per emp. Had the Harvard $8,600,000 gone to small mfg companies, they would be able to “ensure” the ongoing employment of 935 blue collar workers. (Figure a spouse and two kids. That’s food on the table for 3,700 Americans.) Instead, the money goes to Harvard college students. A) A great statement to my folks about their value in America; B) Those poor Harvard kids are going to have a hard time getting a job after graduation IF THE ECONOMY TANKS. C) If my business goes under, I’ll send Harvard a copy of the layoff letters.
BTW, my customers are all manufacturers. I make piece/parts for other manufacturers, some of which make piece/parts for …. And, I buy piece/parts and services from others. If my company folds, it’s because the whole Rube Goldberg machine collapses.
God help us. But at least we’ll have entitiled Harvard grads to tell us what we should have done better.
The money goes to those on Pell grants Steve, which means they could be the kids of your employees. Yes, when they graduate they’ll have a future much brighter probably than your employees, but they didn’t come from that wealth.
Good work on keeping your guys going!
The money ultimately goes to the professors, Harvard doesn’t produce a product
Excellent reply! Having Harvard say it will use all that money for student tuition is an insult to the rest of us who don’t make enough money to send our kids to Haarrvard. Tuition free or not!
And kudos to you for doing more than most in maintaining what’s left of the economy.
Bob, the money goes to students on Pell Grants. The product is the leaders in industry, business, science, law, and liberal art academics for the future.
If you want to get jacked up at pigs at the trough, try this:
““The Joint Committee on Taxation estimated that 43,000 people making more than $1 million would owe roughly $70 billion less in taxes this year because of the suspension.
Inside the historic $2.2 trillion relief package passed by Congress last month is a tax change that overwhelmingly benefits millionaires.
More than 80 percent of the benefits from the new provision will go to Americans earning more than $1 million annually, according to a report released last week by the nonpartisan Joint Committee on Taxation. Less than 3 percent of the benefits from the change will go to people earning less than $100,000 a year.
The change is estimated to cost taxpayers about $90 billion in 2020 and will add roughly $170 billion to the federal deficit over the next decade, the congressional committee’s report found…….”
https://www.newsweek.com/coronavirus-relief-bill-includes-tax-benefit-millionaires-that-will-cost-taxpayers-90-billion-1498956
Hear you. Keep up the great work you are doing!
Current Harvard President Bacow salary is not known, but former President Faust was making $1.7 million/year with perks.
As of April 13, 2020
Harvard announced hiring and salary freezes, president and top leaders take a 25 percent pay cut.
This is ridiculous! Harvard obtained most of its “donations” by hawking its liberal do gooderism: “use your wealth to give a hand up to some poor unfortunate intelligent person who just happens to lack funds to pay the $70k per year tuition.” Never mind d that the wealthy already pay exorbitant taxes for that purpose. Now, Harvard claims to need MORE govt $$$$ to serve the same purpose. It’s a con job – pure and simple. Audit Harvard!
Harvard is being a true pig of these funds while they sit on a $40B endowment – just pure cash. They know their actions are unethical. They are taking advantage of a program that was hastily developed but was CLEARLY intended to help support the businesses who were failing and who employ the 22M people who are now unemployed. Harvard already has $40Billion in endowment to use “for financial assistance to students”. Maybe the endowment could be portioned out to the unemployed and provide each of them with another $1800 to sustain themselves through these difficult times. Harvard is showing itself to be grossly unethical.
SBG, the funds they received were specifically designed for the purpose they are using them for. They are not enriching themselves. Perhaps you might save some of that outrage for the insertion of provisions in the bill which will specifically benefit rich Americans,
“The Joint Committee on Taxation estimated that 43,000 people making more than $1 million would owe roughly $70 billion less in taxes this year because of the suspension.
Inside the historic $2.2 trillion relief package passed by Congress last month is a tax change that overwhelmingly benefits millionaires.
More than 80 percent of the benefits from the new provision will go to Americans earning more than $1 million annually, according to a report released last week by the nonpartisan Joint Committee on Taxation. Less than 3 percent of the benefits from the change will go to people earning less than $100,000 a year.
The change is estimated to cost taxpayers about $90 billion in 2020 and will add roughly $170 billion to the federal deficit over the next decade, the congressional committee’s report found….
…A Democrat from Texas, Doggett noted that the tax change is more than the new funding provided for hospitals and for state governments by the Coronavirus Aid, Relief and Economic Security (CARES) Act.
“Someone wrongly seized on this health emergency to reward ultrarich beneficiaries, likely including the Trump family, with a tax loophole not available to middle-class families,” Doggett said in a statement. “This net operating loss loophole is a loser that should be repealed.”
https://www.newsweek.com/coronavirus-relief-bill-includes-tax-benefit-millionaires-that-will-cost-taxpayers-90-billion-1498956
BTB, what BS in calling an institution ethical. An institution cannot anything. But it’s operators (CEO’s etc) can be and frequently are just that. Just because they can doesn’t mean they should. Their image is now one of a money grabbing super wealthy ponzi institution.
Bob, you hope their image is that, but based on this event that would be BS.
BTB, as Haaavarrd just announced that they would not accept the money they applied for and granted, clearly under false pretenses. This exactly MY point about the image of Haaavarrd. At least they stepped up to do the right thing. And to those of you who defended the Haaarvaard ponzi scheme, I can only say neener neener
So they are going to keep money that isn’t their’s Someone must have sprayed the IVY with Ranch Hand.
Is Khan Academy incompatible with learning? How about 3Blue1Brown and other YouTube channels? Your assertion that profit and learning don’t mix is wrong.
“Harvard did not apply for, nor has it received any funds through the U.S. Small Business Administration’s Paycheck Protection Program {PPP} for small businesses” the university tweeted. “Reports saying otherwise are inaccurate”……..
Word of the day: “fungible”.
That’s a favorite of millennials to use ceaselessly yo prove they CAN have a grownup conversation using a big word correctly. Of course, this just double reinforces their green-ness. It is indeed vexatious. Yes, I took the SAT, too, kids. 😉 Vocabulary is less about the words and more about their implementation. We don’t grade the latter much anymore because many young teachers don’t understand the concept, either.
Not to worry it will go
to the Ice Cream Fund.
Harvard should use the money to refund the tuition and fees of the students they sent hone when the university cancelled classes.
The whole student loan crap is nothing but welfare for mostly white liberals. Peonage for the students while the staff and non-adjunct professors live the high life!
I wonder how much of this money will end up going to staff and cronies?
Squeeky Fromm
Girl Reporter
The only answer being…right wing death squads? Properly social distanced of course.
The news is often unfit to print. Every day we get this apCray about Tom Brady. Jeso.
Shake Shack gives the money back, Harvard keeps it. Well, have to pay the salaries in the Women’s Studies Dept. somehow.
“they” think…
Agreed there, Professor. Full on disclaimer, Pell grants and financial aid and some loans (after injuries ended my basketball playing ‘career’) put me through college. So I’m sensitive to the discussion on that level and remember when Ronald Reagan got the hot idea to actually tax financial aid as income. Rather bizarre times, those.
Count me interested in the debt discussion even more so during times of huge Republican tax cuts, or when Dick Cheney threw out that famous statement about deficits not mattering…, mainly because recoveries from economic calamity always throw that Hitchcockian ticking time bomb under the table aspect to the discussion.
Better yet, since we’re seeing economic devastation becoming a regular part of Republican administrations maybe the guidelines of best practices for distributing crisis money could be determined in less of a pressure chamber, sans Mitch McConnell in the room?
Just a thought.
Mainly, Harvard shouldn’t be penalized for being able to raise endowment money, but should be completely scrutinized for keeping their aid to Pell grant recipients.
Harvard does not need any public assistance…they should give the money back, so it can be used for those institutions that actually have need of it.
Greed is not something that Harvard should be displaying during this time of actual crisis and need by others.
Agreed. Harvard seems to be saying: “Get and keep all the money you can get your mitts on–doesn’t matter whether you really need it, or that taking it increases the national debt pro tanto and diverts money from those who desperately need it just for survival, all in the context of sitting on a $40 billion cushion.” The CARES Act was supposed to be a life preserver, and Harvard is misusing it to avoid dipping into its huge reserves.
This is nothing but a raw display of arrogant greed, and, IMHO, incompatible with the mission of any institution purporting to promote higher ideals, or any other worthy ideals for that matter. Correct me if I’m wrong, but doesn’t Harvard have a school of religious studies? Why don’t they weigh in?
Harvard and Yale….
All that Ivy League apCray. They don’t even know piglatin and the think their itShay don’t stink.
But. The money is their money.