Mnuchin: Wealthy Private Schools Should Return Coronavirus Small Business Aid
U.S. Treasury Secretary Steven Mnuchin called on some wealthy private schools to return emergency federal relief aid intended to help small businesses weather the fallout of the coronavirus.
His statement came in a tweet Friday after the Los Angeles Times reported that his own children's school, Brentwood School in West Los Angeles, received a loan through the Paycheck Protection Program, despite having an endowment of more than $17 million.
St. Andrew's Episcopal School in Potomac, Md., which President Donald Trump's son attends, also accepted the aid, as did Sidwell Friends, the alma mater of former President Barack Obama's daughters, the New York Times reported Wednesday. That's despite having relatively large endowments and prestigious alumni.
The loans are intended to help qualifying small businesses and non-profit organizations retain staff through financial uncertainty. They will be forgiven, or essentially converted to a grant, if recipients avoid layoffs and pay cuts for eight weeks. Under revised federal guidance, applicants must certify that "current economic uncertainty makes this loan request necessary to support the ongoing operations."
Mnuchin has been critical of high-profile organizations, like the Los Angeles Lakers, that sought the funds. His tweet comes after weeks of controversy over recipients of the loans amid concerns that the smallest businesses most at risk did not receive a large enough share of the federal aid. Restaurant chains, like Shake Shack, opted to return the loans. The program has been in high demand: After exhausting its original $350 billion in funds, Congress replenished it with an additional $310 billion.
More broadly, Trump has also criticized higher education institutions, like Harvard University, saying they shouldn't receive aid through other parts of a massive federal relief package administered by the U.S. Department of Education.
To be sure, private schools around the country have showed signs of financial strain and threatened closure as governors order schools closed and the nation confronts a recession that threatens to drive down charitable giving and enrollment. Some Roman Catholic schools have already announced plans to close permanently. That sector has struggled in recent years before the stress of the pandemic.
The National Association of Independent Schools has updated its private school members on the criteria for federal coronavirus relief.
But critics of the wealthier private schools suggest they may not need the small-business aid to retain their staff and that well-connected board members and graduates may give them an advantage with banks that administer the program.
Before Mnuchin's tweet, both Sidwell Friends and St. Andrew's said they intend to keep the aid.
The funds will be used "to ensure retention of our full faculty and staff, including hourly employees and coaches, during this very challenging and uncertain time," St. Andrew's said in a statement to the Times.
As we reported in April, charter school advocates have also faced criticism for encouraging the publicly funded, independently managed schools to apply for Paycheck Protection Program funds. It's not clear if any charter schools have recieved the aid.
Photo: Treasury Secretary Steven Mnuchin speaks about the coronavirus in the James Brady Press Briefing Room of the White House April 2. —AP Photo/Alex Brandon
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