There was something of a cheer from the White House last week when several selective colleges announced they would decline federal dollars meant to help students and colleges weather the fiscal crisis caused by the coronavirus pandemic.
President Trump and his education secretary, Betsy DeVos, seemed to treat the wave of refusals as a coup for the administration. DeVos publicly applauded the elite colleges while Trump hailed Harvard University’s decision at a news conference.
The decision to turn down the federal stimulus money was seen largely as a political reaction — an acquiescence to the backlash from conservatives against institutions with hefty endowments.
As colleges and universities have struggled to devise policies to respond to the quickly evolving situation, here are links to The Chronicle’s key coverage of how this worldwide health crisis is affecting campuses.
But it’s not just the elite institutions that are hesitating. As of Monday — nearly three weeks after the student portion of the stimulus package was made available — about 60 percent of eligible institutions had applied for that money, according to Angela Morabito, an Education Department spokeswoman. One possible reason for the holdup, according to legal experts: worries over reputation and legal liability, as well as frustration over the confusion that has characterized the distribution of the funds.
One of the most recent to announce that it will decline stimulus money is Duke University, based, in part, on the risks that the institution could face under the law. “After careful review, we believe that accepting the funds, even as a pass-through entirely to students, would impose unacceptable legal and regulatory liabilities on Duke that could have a significant negative impact in the future,” said a prepared statement from the university.
For Scott Schneider, a higher-education lawyer with the firm Husch Blackwell, this combination of political and regulatory risks is exemplified by one particular requirement of the law and guidance. A college that receives the money must continue to “pay all of its employees and contractors during the period of any disruptions or closures to the greatest extent practicable.”
In other words, a college that lays off workers or contractors could be in violation of the law and face fines triple the amount of money they received from the government, under the False Claims Act.
Schneider, a lawyer who represents several colleges, said the words “to the extent practicable” is an ambiguous standard and puts colleges at the mercy of an administration that is not often seen as friendly to traditional higher education.
“This is totally uncharted territory,” Schneider said, “and schools need to be in a position to maintain some sort of flexibility.”
Strings Attached
In announcing the plan to release the emergency grants for students, DeVos emphasized that colleges would be given a great deal of flexibility to spend the money as they saw fit.
Since then, however, institutions have learned the statute and the department have attached many more strings to those dollars.
Barbara K. Mistick, president of the National Association of Independent Colleges and Universities, said colleges want to be good stewards of the money. But they are also wary about spending it without running afoul of the department.
“There’s so much of it that’s still up in the air or not working as it should,” said Mistick, whose association represents private, nonprofit colleges. “Last week we thought there was going to be more clarity,” she said, “now there’s more confusion.”
For example, before the department released its latest guidance on the law, colleges thought they would be able give emergency grants to international students, Mistick said. But last week, the department announced that only students who were eligible for federal student aid could receive the money. That decision also denies grants to undocumented students — even those who have registered for the Deferred Action for Childhood Arrivals program.
Colleges face another hurdle in verifying that even all students who receive the emergency money are actually eligible, since not all students complete the federal forms for financial aid, known as the Fafsa.
“The Title IV eligibility thing really, for me, throws us a curve because DACA students cannot have the funds, international students can’t have the funds,” said G. Michael Johnson, director of financial aid at Columbia Gorge Community College in the Dalles, Ore. “Frankly, I don’t know how schools will be able to determine students’ potential eligibility for the funds without having a Fafsa on file,” he said.
Ambiguous Language
The requirement to maintain the pay of employees and contractors is less a problem with the department’s guidance than with how Congress wrote the law, said Dennis M. Cariello, a lawyer with the firm Hoban Marren Babbo & Rose, and a former deputy general counsel at the Education Department.
“This first call I got after the act came out was about this section,” he said. But he doesn’t think that the department will be out to get colleges just for cutting some positions or workers’ pay. The intent of the law is to make sure that the neediest students can continue their education and it’s effectively less costly for the government if that happens.
“It would defy logic for the department to say that now that you’ve taken this money we’re going to hold you to the strictest standard,” he said.
Other legal experts aren’t so sure. Melissa S. Watkins, a lawyer with the firm Steptoe & Johnson, said the language seems ambiguous and the requirement to pay contractors as well as employees is unusual. Colleges should plan on providing detailed reports about how they decided on cutting any jobs, and institutions that don’t absolutely need this money should consider declining it, she said.
The other thing that many institutions are considering is how their actions will be viewed by an administration that has taken an aggressive legal stance toward traditional higher education and, in particular, prestigious colleges. In September, for example, the National Association for College Admission Counseling agreed to change its code of ethics in response to the threat of an antitrust suit from the Department of Justice.
In 2018, the Education Department’s Office for Civil Rights reopened an investigation into allegations of anti-Semitism at Rutgers, and the following year threatened to withhold federal funds from the University of North Carolina at Chapel Hill over its joint Middle East studies program with Duke University unless it revised its schedule of activities. Those actions raised questions about whether the department was upholding the First Amendment right to freedom of speech for those who support sanctions against Israel.
Given those actions, say some college officials, it’s not hard to see how the administration would target some universities over the federal stimulus money.
“Higher education is at the forefront of the culture wars, you can see it all over, and it’s pretty clear which side the administration falls on,” said Schneider of Husch Blackwell. “This is not about good policy, this is the culture wars.”
Danielle McLean contributed to this report.
