Citing ‘possible regulatory liabilities,’ WU turns down federal CARES funding

and | Senior Editors

Washington University announced Wednesday that it would reject the $6.4 million pandemic relief package it had been allocated by the federal government.

The package was allotted to the University as part of the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act passed by Congress in March. $14 billion of the fund was set aside for 4,500 qualifying colleges and universities.

Grace Bruton | Student Life

“After careful consideration of the possible regulatory liabilities associated with the Fund, we have concluded that accepting this funding would not be the correct course of action for our long-term recovery,” the University wrote in a statement. The statement did not clarify what the University meant by “possible regulatory liabilities” and administrators could not be reached for comment.

Several schools with extensive endowments, including Harvard University and Stanford University, have also said they would not accept the federal aid, following criticism from President Trump and Secretary of Education Betsy DeVos for being granted access to aid despite having a high endowment.

However, the University’s choice to deny the money comes nearly a month after those schools had announced that they would not take the relief. Washington University’s endowment is $8.1 billion, significantly lower than Harvard’s $40.9 billion or Stanford’s $26.4 billion.

The University had included the $6.4 million allocation as a possible source of revenue in an April 20 letter to faculty and staff.

In the letter, Chancellor Andrew Martin and two other administrators wrote that the University had “started work on exploring cost recovery” through the CARES Act. “While certainly significant, much of this funding is restricted for conditional use and in no way makes up for our losses,” the administrators wrote.

Like most universities nationwide, the University is experiencing financial hardship because of the coronavirus pandemic. Projecting a revenue loss of $175 million by the end of the fiscal year, the University furloughed 1,300 employees and cut administrator salaries by 15-20%.

The Department of Education mandated that at least 50% of the CARES Act funds must be used to provide emergency grants for students. Many schools that have accepted the relief, such as Vanderbilt University and Cornell University, have put all of the funding into supporting students who receive financial aid.

Missouri Senator Josh Hawley was among the critics of universities accepting federal aid. In April, Hawley introduced a bill that would prevent institutions with endowments larger than $10 billion from receiving CARES Act funds unless they had already spent 10 times the amount allocated to them on emergency grants for students.

The University maintained that it would explore other means of assisting its students. “We remain firmly committed to providing financial support to our most vulnerable students through other means, and will dedicate additional university resources to ensure that we are able to meet demonstrated need,” the statement read. “We have offered funding to students through grants, housing and dining refunds, our Crisis Response Fund and other programs, and will take necessary steps to increase our support as the situation continues to evolve.”

The University’s Crisis Response Fund was meant to address students’ essential needs through May 15, such as unexpected rent and utilities for non-University housing, groceries, medicine and unreimbursed co-pays for physical or mental health services.

“While we will make every effort to offer some emergency funding for stipend requests that meet the criteria laid out above, we know that it will not be possible for us to grant every request. Some students will need to rely upon non-university resources to meet their needs,” Sam Fox Associate Dean of Students Georgia Binnington wrote in an email to students, April 28.

The University issued prorated refunds for housing, parking fees and health and wellness fees, as well as lost wages from work study and meal plan balances on a student-by-student basis.

The University has not yet announced whether it would accept the $16.5 million allocated to the Medical School from a different portion of the CARES Act.

Sign up for the email edition

Stay up to date with everything happening at Washington University and beyond.