Congress Gave $801 Million to 25 Colleges with $350 Billion in Endowments Via CARES Act

Campus of the UC Berkeley in Berkeley, California, on Jan. 16, 2009. brainchildvn/cc-by-2.0

When Congress approved the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, the measure included a “Christmas-in-March” gift of $801 million to the nation’s 25 most-richly endowed colleges and universities.

The largesse for the campus institutions was first exposed May 5 by Open The Books, a Chicago-based government spending watchdog, but President Donald Trump sparked a national outcry in April, when he demanded that Harvard return the $8.6 million it was slated to receive.

But the $801 million was only a small part of the total allocated by the CARES Act for colleges, universities, and trade schools across the nation, according to Open The Books President Adam Andrzejewski, who announced the findings of his group’s analysis in a Forbes magazine article.

“We scoured the backend of the U.S. Department of Education website and found the full database: 5,137 colleges and universities that were awarded $12.5 billion in coronavirus relief. None of it has to be paid back,” he wrote.

Harvard, with its $40.9 billion endowment, opted not to accept the funds after Trump spoke out and Princeton, which was slated to get $2.4 million to supplement its $25.9 billion endowment, did so as well soon after.

The nation’s largest university systems are slated to receive huge checks and there are no signs as yet that officials with those schools intend to follow Harvard’s example.

The University of California System has a $21 billion endowment and stands to receive more than $260 million under the CARES Act, according to the Open the Books analysis.

The University of Texas System has an even larger endowment at $31 billion, but was included in the relief act for $173 million. The Lone Star State’s other large public university system, Texas A&M, has a $13.5 billion endowment and will get $82 million.

The Pennsylvania State System has the smallest endowment among the 25 at $4.5 billion and will receive nearly $55 million from the federal government under the measure.

Fifth on the list is the Ohio State University System that also has a smaller endowment than most of the top 25 institutions, at nearly $5.3 billion. A total of $42.8 million will go to the Ohio system.

It should be noted that the funds going to these schools were determined by the U.S. Department of Education, according to a formula Congress included in the measure.

Higher education institutions collectively spent nearly $75 million lobbying Congress in 2019.

Brian Darling, former senior counsel to Sen. Rand Paul (R-Ky.), told The Epoch Times that “it is a sad fact of government that when they offer up aid, the institutions and corporations who can afford to hire lobbyists are the ones who get help, while the truly distressed Americans are left behind.”

Other critics of wasteful federal spending interviewed by The Epoch Times also jumped on the big allocations for schools with huge endowments.

“Giving colleges and universities who have a combined endowment of $350 billion any taxpayer money shows that Congress isn’t interested in oversight or smart and targeted spending,” said Taxpayers Protection Alliance President David Williams.

“Congress allocated $16 billion to colleges and universities in the CARES Act for higher education to help struggling institutions but never even considered that some of these institutions have healthy endowments,” he said.

Citizens Against Government Waste President Tom Schatz said, “Members of Congress are adept at spending money they have to borrow from taxpayers to pay for programs they don’t evaluate, and then they fail to recover the money that is wasted.”

Schatz and Darling both noted that Congress can go back and fix the relief measure.

“The fact that Congress gave hundreds of millions of dollars to the top colleges and universities in this nation shows that there were structural problems with the CARES Act that need to be addressed on the back end,” Darling said.

“There is now time to review the effectiveness of how the funds have been spent to date and fix any problems before more spending bills are passed,” according to Schatz.

Cato Institute Director of Tax Policy Chris Edwards said such spending isn’t new in Congress:

“In an 1835 speech, Tennessee Rep. Davy Crockett lambasted the ‘log roll’ system in the House, and in 1836, Virginia Rep. John Patton criticized a pork-filled Army Corps bill as ‘most disreputable and corrupting.’”

Logrolling is the informal congressional process of trading votes for each other’s spending projects.

Contact Mark Tapscott at [email protected]