Betsy DeVos Sends Coronavirus Money To Help Tiny Colleges. Did They Need It?

Education Secretary Betsy DeVos doled out the latest batch of higher education funding from the CARES Act this week. In this latest tranche of money, the Department of Education sent more than $300 million to incredibly small colleges, including seminaries. That number going to such small schools has raised some eyebrows about how the Education Department allocated this money.

A provision of the CARES Act created a set aside for the Secretary to send funds to colleges and universities most impacted by the coronavirus. The legislation allocated 2.5 percent of the $13.95 billion in the Higher Education Emergency Relief Fund (HEERF)—almost $350 million—to help the schools with the most unmet need to dray costs of the coronavirus or to provide grants to students.

This week the Department of Education allocated the vast majority of this set aside and sent it to tiny colleges. It is unclear that those schools needed the money, especially compared to many other institutions.

Ben Miller, Vice President for Postsecondary Education at the Center for American Progress, analyzed where the money went and broke the data down on Twitter. The CARES Act grants to institutions were on a per-student basis—though weighted by full- or part-time status—with a premium for Pell Grant recipients. But these schools received much larger allocations per student than at the majority of schools.

And it’s not even that these schools served large numbers of Pell Grant students. According to Miller, the top 20 colleges just had 212 Pell students, even though the main formula was supposed to prioritize those students.

These schools were so small that for many of them this money was equivalent to more than half of their annual revenues. It was more than the annual revenues for early 40 of the schools.

This money was meant to help those institutions that need additional assistance after the first set of grants went out. The section of the law that allocated these funds says they go to institutions “that the Secretary determines have the greatest unmet needs related to coronavirus.”

But the Department didn’t appear to even ask schools about their unmet need. Instead, they relied on an additional provision of the CARES Act that said to prioritize those institutions that did not receive at least $500,000 under the initial grants.

This $500,000 provision comes from another section of the law that reads, “In awarding grants under section 18004(a)(3) of this title, the Secretary shall give priority to any institution of higher education that is not otherwise eligible for funding under paragraphs (1) and (2) of section 18004(a) of this title of at least $500,000.”

But that’s not the end of the sentence. It goes on to say, “and demonstrates significant unmet needs related to expenses associated with coronavirus.” The Department’s interpretation of the legislation ignores that. The Department didn’t have to give the money to schools that received less than $500,000 in the first round of funding. They just had to prioritize those that didn’t and had unmet need. It is not clear these institutions have more or less need than many other schools.

Now the Department is left with just $27.1 million to spend on colleges that have been hit the hardest by the virus. Colleges and universities are already asking for more relief funds. Many have announced pay cuts, furloughs, and layoffs.

Of course, $300 million wouldn’t have prevented this from happening at most schools, but it certainly would’ve helped those struggling the most. Instead, these tiny colleges will see a boon. Some may have had greater needs, but the Secretary did not require them to demonstrate that. Instead, her overly simplified methodology potentially wastes money on schools who aren’t struggling.