Trump to claw back Harvard’s coronavirus PPP after $40B university tapped relief fund

Large businesses shouldn’t be able to get PPP loans, Mnuchin insists

Treasury Secretary Steven Mnuchin says ‘very clear guidance’ on the Paycheck Protection Program will be provided to businesses so the system isn’t abused.

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The outrage over Ivy League power school Harvard University receiving $8.7 million in federal aid has reached the White House.

At the daily coronavirus task force briefing Tuesday, President Trump said that “Harvard is going to pay back the money. They shouldn’t be taking the money.”

FEDS, CONGRESS LOOK TO AVOID CORONAVIRUS PPP MISTAKES IN ROUND 2 OF LENDING

In this Dec. 13, 2018, file photo, a gate opens to the Harvard University campus in Cambridge, Mass. (AP Photo/Charles Krupa, File)

According to thebestschools.com, Harvard is the richest college in the country with an endowment worth more than $40 billion.

“They have one of the largest endowments anywhere in the country, maybe in the world,” said Trump. “They are going to pay back that money.”

In an email to the university newspaper, the Harvard Crimson, university spokesman Jason Newton said the money has been allocated to helping its students.

SBA CORONAVIRUS LOAN PORTAL PUTS THOUSANDS OF BUSINESSES' INFORMATION AT RISK 

“Harvard is actually allocating 100% of the funds to financial assistance for students to meet their urgent needs in the face of this pandemic,” Newton wrote.

The CARES Act provides $14 billion in assistance to colleges and universities with the stipulation that half of the money must be used for emergency financial aid for undergraduate and graduate students in need to "help cover expenses related to the disruption of campus operations due to coronavirus,” according to a letter from Secretary of Education Betsy DeVos to college and university presidents.

Still, the idea that a university with such a large endowment would accept federal money when others could use it did not sit well with many on Pennsylvania Avenue from the White House to Capitol Hill.

As for the SBA money that also made it into the bank accounts of large companies such as Shake Shack, Trump and Treasury Secretary Steven Mnuchin expect that money to be returned as well.

“The intent of this was for businesses that needed the money,” said Mnuchin. "The intent of this money was not for big public companies that have access to capital.”

TickerSecurityLastChangeChange %
SHAKSHAKE SHACK INC47.10+0.67+1.44%

Shake Shack has already announced it will return its funding, but as for other big public companies, the clock is ticking.

“If you pay back the loan right away you won’t have liability to the SBA and the Treasury,” said Mnuchin, “but there are severe consequences for people who don ‘t attest properly to this certification.”

Mnuchin said the administration will give companies "the benefit of the doubt" and will add a frequently asked questions section to the SBA's website providing the criteria businesses need to meet in order to qualify for SBA loans.

According to Mnuchin, the SBA has processed more loans for small business coronavirus relief than it has in total for the past decade, with over 1 million companies with less than 10 workers receiving PPP funding.

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Senate Majority Leader Mitch McConnell of Kentucky speaks with reporters after the Senate approved a nearly $500 billion coronavirus aid bill, Tuesday, April 21, 2020, on Capitol Hill in Washington. (AP Photo/Patrick Semansky)

On Tuesday, the Senate passed the roughly $480 billion coronavirus relief bill by voice vote. The bill gives $380 billion to the PPP to provide "crucial small business support to keep workers on the payroll," $75 billion to support hospitals, and $25 billion to support coronavirus testing efforts.

The administration said at Tuesday's briefing that it expects the bill to be passed in the House as early as Wednesday.

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