BYU rejects additional federal COVID-19 relief funds

BYU has opted to not accept federal funding allocated to colleges and universities under the Coronavirus Response and Relief Supplemental Appropriations Act. (Sydnee Gonzalez)

BYU will not accept over $50 million made available to it as part of the federal government’s latest COVID-19 relief package.

Congress allocated over $22.7 billion to the Higher Education Emergency Relief Fund when it passed the Coronavirus Response and Relief Supplemental Appropriations Act late last year.

BYU spokeswoman Carri Jenkins said the university’s reasons for rejecting the funds are the same reasons it didn’t accept CARES Act funding last May. Jenkins directed the Daily Universe to a May 2020 press release, which states BYU did not request federal aid and can provide for its students using its own funds.

Unlike last year, though, Jenkins said the university has not established a funding program to help students cover costs related to COVID-19. “Traditional means of financial aid are available, including some loan options for students who need immediate assistance,” she said.

For students who lost jobs or are experiencing other financial setbacks during the pandemic, taking on more debt through a loan may not be the best solution. BYU offers short-term loans, which must be paid about two months into a semester and are accompanied by a temporary financial hold on a student’s account. A COVID-19 FAQ on BYU’s Student Financial Services website says these loans “in essence allow you to extend the tuition deadline.”

Coronavirus Response and Relief Supplemental Appropriations Act requires colleges to provide at least the “same amount” in financial aid grants to students that it was required to provide under the CARES Act, which stipulated that at least 50% of the allocated funds went directly to students. For BYU, this amount would be $16,136,493. Divided equally between BYU’s 34,830 students, that would be $463 per student.

Direct grants for all students under the Coronavirus Response and Relief Supplemental Appropriations Act would be unlikely since the law requires institutions to prioritize students with exceptional need, such as but not limited to students who receive Pell Grants. Even limiting student grants to Pell Grant recipients would impact a large number of students, however.

Given BYU’s high percentage of married students, it tends to have a disproportionately large number of students who receive Pell Grants. According to the Salt Lake Tribune, 12,126 BYU students received grants during the 2018-2019 school year — that’s over a third of students.

When asked whether BYU had considered accepting the funding and giving 100% of it to students, Jenkins simply reiterated that BYU is not considering accepting the funds.

Some universities, including Harvard, originally announced they would allocate 100% of its CARES Act money last year before ultimately deciding against accepting the money due to political pressure.

Harvard, along with BYU and other institutions with large endowments, including Yale and Duke, were pressured not to accept CARES funding by individuals and politicians, including former President Donald Trump, who argued that well-off universities didn’t need taxpayer money.

A Department of Education spokesperson said unlike last year — when former Secretary of Education Betsy DeVos actively advised wealthy eligible institutions to reject funding — the department is not discouraging any eligible institution from applying for funding.

Except for Harvard, which announced it will not apply for funds, many wealthy institutions have yet to announce their acceptance or rejection of CRRSAA funds.

One hang-up for these universities could be a provision under the Coronavirus Response and Relief Supplemental Appropriations Act, which places restrictions on institutions that are subject to the 2017 Tax Cuts and Jobs Act — popularly referred to as the endowment tax.

The provision would cut these institutions’ funding by half. The remaining funds must be used for financial aid grants to students or for sanitation, personal protective equipment, or other expenses associated with general campus health and safety related to COVID-19.

“The Department will require those institutions that paid or will be required to
pay the tax to complete and submit a form disclosing this tax status,” a Department of Education spokesperson said in an email to the Daily Universe. “Institutions paying this tax may also seek a waiver of these limitations.”

At over $1.7 billion, BYU has the 51st largest endowment among U.S. universities, according to 2018 data from National Center for Education Statistics. The university’s financial information isn’t public, but if its endowment is a still similar size, it would not be subject to the endowment tax, which only applies to schools whose endowments total at least $500,000 per tuition-paying student.

If BYU doesn’t claim the Coronavirus Response and Relief Supplemental Appropriations Act funding, what happens to it? The law directs the Department of Education to begin reallocating the majority of the funds to other eligible institutions after April 15, but the department spokesperson said that for the portion of funds not covered under that direction, “the department’s allocation plans are still under development.”

Likewise, not all of the CARES Act funding universities rejected last year has been reallocated. The Department of Education spokesperson said that while certain amounts of unclaimed funding were repurposed and given to other colleges, “the remaining amounts of unobligated CARES Act funds have not been reallocated at this time.”

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