Windfall for Small Colleges

Like a lot of colleges these days, God’s Bible School and College in Cincinnati is feeling the effects of the pandemic. It has had to refund room and board to students after the college took its teachings, not only of scripture, but business and music, online.

The college has a small but dedicated group of supporters who donate money “faithfully,” said Aaron Profitt, its vice president for academic affairs. It had already received $155,000 from other pots of higher education coronavirus relief money in the CARES Act, and the college wasn’t planning to ask for more.

So Profitt was surprised earlier this week when the Education Department set aside another $337,447 in aid for the small school with 378 students. Especially so when he learned the money was coming from a pot of CARES Act money that Congress wanted distributed based on having “the greatest unmet needs related to coronavirus.”

He said, “All told, we’re doing OK.”

At a time when many other colleges are struggling with the economic fallout from the pandemic, making layoffs and even facing the prospect of going out of business, the Education Department is coming under fire from critics for allocating hundreds of thousands of dollars to hundreds of institutions with small numbers of students, without first looking into whether they really need it.

In doing so, Senator Patty Murray, the top Democrat on the Senate education committee, said in a statement to Inside Higher Ed Wednesday, U.S. Education Secretary Betsy DeVos is violating how Congress wanted tens of millions in stimulus aid to be spent.

As a result, critics fear the approach the department is taking in distributing the money will delay getting help to the colleges most in need. And it could end up creating a disparity, in which a small school like the Bible college with hundreds of students is slated to get $1,377 per student to help it survive, while others, like LaGuardia Community College, in Queens, N.Y., will get only about $554 per student, despite sitting in the eye of the pandemic.

“The statute wasn’t written to give a bunch of seminaries that serve a few dozen students a world-class IT department while community college students starve,” said one particularly vocal critic of the Education Department’s handling of the money, Ben Miller, vice president for postsecondary education at the liberal Center for American Progress.

The controversy revolves around how the Education Department is interpreting the dual goals Congress laid out for a portion of the stimulus funding the CARES Act created for higher education. The stimulus package calls for 2.5 percent of its $14 billion in higher education aid to go to institutions with “the greatest unmet need.” But it also requires the Education Department to give priority to institutions that have not gotten at least $500,000 from other parts of the package and can also demonstrate "significant unmet needs related to expenses associated with coronavirus."

A department spokeswoman said that Congress had emphasized getting money to institutions that had been left out of other parts of the aid package. So it decided to simply give all institutions that had received less than $500,000 in stimulus funding whatever amount needed to get up to that threshold.

But what's angering critics like Miller and Terry Hartle, the American Council on Education’s senior vice president for government and public affairs, is that the department just spread the money around without looking at how much need these institutions have for the money.

That’s why Denver’s Montessori Casa International, which had received $3,492 in stimulus funds, is now in line to get another $496,508. That means the school, which trained 12 students in the Montessori method in the 2017-18 academic year, could get a whopping $41,000 per student when combined with the other CARES Act funds it is getting.

It’s also why Massachusetts’s Conway School of Landscape Design, which had 18 students that academic year, is slated to get $493,308, or a total of about $27,000 per student. The Bergin University of Canine Studies, in California, was allocated another $472,850 from the pot, meaning it could receive about $5,800 for each of its 86 students.

To be sure, larger institutions are receiving far more stimulus funds than the small ones. Northwest Missouri State University will get $4.8 million. But the university, which is also facing taking a share of $76 million in higher education cuts the state is making, had 7,402 students in the 2017-18 academic year, meaning it will be getting only $647.50 per student.

Delgado Community College, in another hot spot of the pandemic, New Orleans, is getting $11.3 million in CARES Act funding. But with more than 20,000 students, that works out to $550 per student.

Meanwhile, the Institute of Taoist Education and Acupuncture, in Colorado, is slated to get about $13,000 for each of its 37 students. The Dragon Rises College of Oriental Medicine, which had 49 students at its campus in Florida, is set to get about $10,000 per student.

And the Hypnosis Motivation Institute, in California, stands to get about $2,200 for each of its 220 students.

Congressional aides from both parties also said this isn’t what was supposed to happen.

“The idea was not, as you state, to give all schools at least $500,000 of CARES money. The legislation doesn’t say that, either,” a Senate Republican aide said last week.

Murray, the Democratic senator, blamed DeVos. “When we passed the CARES Act, we reserved a portion of the Higher Education Emergency Relief Fund specifically for schools with the greatest unmet need, whose students would need help and relief. But Secretary DeVos has once again completely ignored the intent of Congress and given the funds to schools without determining if they actually need it. Put simply, this is yet another harmful decision from Secretary DeVos that will keep relief from those who need it most.”

Murray has also accused DeVos of violating Congress's intent by deciding to exclude college students brought to the U.S. illegally as children from being able to get emergency grants in the stimulus package.

David Baime, senior vice president for government relations and policy analysis at the American Association of Community Colleges, said that from his members' perspective, "it is unfortunate that the allocations do not take into account campus and student needs, even though Congress clearly intended that … Community colleges are under acute financial stress, with more likely to come, and they could surely have used more assistance, or any assistance, for that matter."

Education Department spokeswoman Angela Morabito, though, said that just because the money was set aside for the small institutions doesn’t mean they will end up getting it all. “In order to receive this funding, an institution will need to request it. Any institution that does not need this money should simply decline to request it so schools will not be in the position of having to return unneeded funds,” she said.

The money that’s left over, she said, will then be distributed through competitive grants, where need will be considered.

But critics say that’s backward and slows getting the money where it’s most needed. The department could have asked institutions, particularly in hard-hit areas, to apply for the money, and the department now could be sending it to where it’s needed most, prioritizing small institutions, Miller said.

Miller noted that colleges have until Aug. 1 to apply for what critics are calling the top-off funds. “We’re not going to know how many turn the money down until the deadline passes, and these funds are going to be stuck at least through August,” Miller said.

“The law clearly says that the money should go to those who have been hardest hit by the coronavirus,” said Hartle. “It does not say that schools hit hardest by the coronavirus should get the leftovers.”