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Gordon College could be forced to repay a $7 million Paycheck Protection Program loan issued during the coronavirus pandemic after a judge largely rejected arguments that it should be eligible for loan forgiveness and was facing religious discrimination, Christianity Today reported.
Gordon, a private, evangelical institution located outside Boston, received a PPP loan during the pandemic that college administrators believe should be eligible for forgiveness, since its officials say it employed fewer than 500 employees at the time of the loan application.
Gordon College counted 495 full-time-equivalent employees in its loan application. However, the college had self-reported 639 total employees in other submitted loan documents. That distinction appears to run afoul of how the Small Business Administration counts employees.
When the SBA denied a request for loan forgiveness, Gordon sued the agency.
Gordon has argued that 25 other institutions counted employees in the same manner and subsequently had loans of similar or even greater amounts forgiven. But last month a federal judge rejected that claim, writing that the college “offers no facts to support its conclusory allegation that these 25 other colleges are similarly situated—much less similarly situated in all respects except religious affiliation.” The judge also wrote there was no evidence to show that SBA’s methods of tallying employees “were enacted to target or single out” religious institutions.
Gordon College lawyers have also argued that the SBA did not clarify how employees should be counted until after the institution received its PPP loan. While a federal judge rejected the religious discrimination argument last month, part of the college’s lawsuit against the SBA remains intact.
