Colleges turn to Federal Reserve for more coronavirus aid

  • Despite receiving $14 billion in initial coronavirus aid funding, colleges and universities are looking to the Federal Reserve for more help.
  • An organization that represents over 1,700 colleges and universities asked Fed Chairman Jerome Powell to expand the Main Street Lending Program to include higher education institutions.

After receiving $14 billion in Coronavirus Aid, Relief, and Economic Security (CARES) Act funding, colleges and universities are now turning to the Federal Reserve for more aid. 

The American Council on Education (ACE) recently sent a letter to Federal Reserve Chairman Jerome Powell asking for clarification and exemptions for the newly announced Main Street Lending Program. The organization, which represents more than 1,700 colleges and universities, asked the Fed whether “nonprofit private and public institutions” are eligible for the program, and if student employees can be exempt from the employee cap. 

“It is vital to provide this access to low-interest loans to nonprofit colleges."   

“Institutions of higher education, often the largest or one of the largest employers in their local communities, are facing a major cash flow crisis in light of the reduced revenue and increased expenses imposed by the COVID-19 pandemic,” ACE President Ted Mitchell said in the request to the Fed. 

[RELATED: Betsy DeVos tells colleges not to give coronavirus aid to illegal immigrants]

Mitchell, who wrote Powell on behalf of more than two dozen other higher education interest groups, claimed access to the loan program was “vital” for colleges and universities. 

“It is vital to provide this access to low-interest loans to nonprofit colleges and universities financially devastated by the pandemic and struggling to continue to educate and assist students and employ the millions of faculty and staff who work on campuses around the country,” Mitchell added. 

The Fed first declared that only small and mid-sized businesses that employ up to 10,000 employees would be eligible for the loans, which currently range from $500,000 to $200 million. The cap on employees has since increased to 15,000 employees. 

The Fed also increased revenue requirements so businesses with $5 billion in annual revenue are eligible. 

[RELATED: Hawley, Jordan team up to block coronavirus aid from going to rich colleges]

Though the Fed made changes, the question on public and nonprofit institution eligibility remains unclear. Additionally, according to Yahoo Finance, a Fed-imposed earning requirement would likely prevent nonprofits that are operating at a loss from participating in the program. 

One university already said it is ineligible. The University of Kentucky told Yahoo Finance that it does not currently qualify for the loan program.

Campus Reform reached out to the Federal Reserve Bank of Boston, which is leading the implementation of the Main Street Loan Program, for comment, but did not receive a response in time for publication. 

Follow the author of this article on Facebook: @eduneret and Twitter: @eduneret 



STAY INFORMED
Get exclusive access to breaking CampusReform stories as they happen. Sign up below and we'll keep you in the loop.
 Weekly Digest

 Daily Emails

Eduardo Neret
Eduardo Neret | Digital Reporter

Eduardo Neret is a digital reporter for Campus Reform. Prior to taking on his current position, Eduardo served as the Senior Florida Correspondent for Campus Reform and founded a conservative web publication where he hosted a series of interviews with notable conservative commentators and public figures. Eduardo’s work has appeared on the Fox News Channel, FoxNews.com, The Washington Examiner, Daily Caller, The Drudge Report, The Blaze, and The Daily Wire. He most recently served as a contributor to the Red Alert Politics section of The Washington Examiner. In addition to his independent journalism, Neret also previously worked at the Department of Justice and the Fox News Channel. He has appeared on numerous radio programs and NewsMaxTV to discuss his work and comment on relevant political issues.

20 Articles by Eduardo Neret