Sunday, January 10, 2021
Inside Higher Ed, Wealthier Colleges and Universities Are Targeted In Covid Relief Bill:
After President Trump and Education Secretary Betsy DeVos criticized giving private colleges and universities with large endowments help in the CARES Act, wealthier institutions like Harvard, Yale and Stanford Universities had their share of the money in the latest coronavirus relief package cut in half.
Under a little-noticed provision in the bill passed two weeks ago [The Coronavirus Response and Relief Supplemental Appropriations Act of 2021], private higher education institutions that were required by a 2017 law to pay a 1.4 percent excise tax on net investment income not only had their aid slashed, they were barred from using the money they will get to defray their financial losses from the pandemic. The relief bill allows them only to use the aid on emergency grants to students or to pay for personal protective equipment and other health and safety costs associated with the coronavirus. Higher education received about $23 billion in the legislation.
The provision affects about 30 private colleges and universities who have to pay the tax because they have at least 500 tuition-paying students and assets of at least $500,000 per student, said Steven Bloom, the American Council on Education’s government relations director. However, that number is constantly changing, particularly during the economic fallout of the pandemic, as the value of the endowments fluctuates over and under the threshold.
Spokespeople for the Education Department and Senator Josh Hawley, a Missouri Republican, who has pushed to keep well-endowed institutions from receiving COVID-19 relief, didn’t return inquiries. But one higher education lobbyist said the provision was apparently pushed by the White House during the negotiations over the package.
The provision is apparently a nod to DeVos, Trump and some Senate Republicans, who had criticized giving colleges with large endowments they could dip into part of the $14 billion in aid the CARES Act allocated to colleges and universities.