Today U.S. Senator Josh Hawley (R-Mo.) announced legislation to prohibit universities from receiving Higher Education Emergency Relief Funds from the CARES Act if they have an endowment larger than $10 billion, unless they first spend some of their own money on coronavirus-related financial assistance for students.
Under the proposal, universities with over $10 billion in endowments would have to spend 10 times the amount appropriated to them according to the formula in the CARES Act to be eligible for federal relief funds. The university would have to demonstrate it spent the money on the same uses of funds required by the CARES Act – emergency financial aid grants to students to cover costs like food, housing, healthcare and childcare, and costs related to the disruption to the delivery of instruction due to COVID-19.
I’m tired of hearing from university execs that “it wouldn’t be prudent” to tap their endowments in this crisis. Fine. But don’t come begging federal taxpayers for money while you sit on billions in endowment funds and students suffer
— Josh Hawley (@HawleyMO) April 22, 2020
Background
The CARES Act provided nearly $14 billion for higher education institutions through the Higher Education Emergency Relief Fund. 90 percent of these funds were awarded to higher education institutions to be used to cover the cost of changes in delivery of education services due to COVID-19 and to provide emergency financial assistance to students. Funds are allocated based on the number of Pell Grant recipients and overall student enrollment at each institution of higher education.