Mnuchin says deep-pocketed private schools should return Paycheck Protection Program loans

[alp227]

Source: CNN

Treasury Secretary Steve Mnuchin called on private schools with endowments to return the funds they received from the federal Paycheck Protection Program, after media reports of some elite schools applying for the loans meant to keep smaller businesses afloat during the coronavirus pandemic.

"It has come to our attention that some private schools with significant endowments have taken #PPP loans. They should return them," Mnuchin wrote on Twitter Friday.

Some private schools like St. Andrew's Episcopal in Maryland, where Barron Trump is a student, plan to accept funds from the PPP, despite having an endowment of more than $8 million, according to a 2017 tax filing.

The school told CNN in a statement Thursday that it applied for the funds to "ensure retention of our full faculty and staff, including hourly employees and coaches, during this very challenging and uncertain time."

Read more: https://www.cnn.com/2020/05/01/politics/mnuchin-private-schools-loans-coronavirus/index.html

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Regarding endowments, ABC had this article last week explaining that endowments often have strings attached.

Jim Hundrieser, the vice president for consulting at the National Association Of College and University Business Officers, told ABC News that "most funds in those endowments are earmarked or designated."

[...]

"Rarely does a family say if some random pandemic comes up feel free to use it however you wish," he added. "It’s usually a long-term gift for a very specific nature."

Hundrieser added that most institutions also have strict spending policies that say you can withdraw a certain percentage from the endowment "and it's those returns on those investment dollars that you can use."

Steven Bloom, the director of government relations at the American Council on Education, told ABC News that it's "really a misnomer to say an endowment."

[...]

Bloom noted that with endowments, "schools are legally bound to spend the money in the way the donors determined when they give their money."

[htuttle]

1. And they were so worried about poor people getting relief money that they didn't deserve

God forbid that someone supporting a family ends up getting an extra $200, but we'll just handle the corporate handouts on the honor system.

[jberryhill]

2. That's just nonsense

There are no asset tests for PPP eligibility. The point is to attempt to provide a forgivable loan as long as most of it is used for payroll.

The PPP is a stupid and inefficient mechanism for the real goal which is to put some money into people's pockets, but it's the one we have right now.

What difference does it make if, say, a restaurant has $100,000 in original artwork hanging on the wall. Do they have to eat into their capital assets and forego the PPP? Why?

If schools have to eat into their endowments to cover operating costs, then why doesn't any other business have to exhaust its capital resources to participate?

[mr_lebowski]

7. I agree ... but when Mnuchin says 'should', that's the tell.

This is PR, and and nothing will happen to them if they don't return it.

[ancianita]

3. He shouldn't have approved their applications in the first damn place. Who's he kidding. This is

more divide-and-conquer PR talk.

[Maxheader]

9. That's what I was wondering...

the govt should have access to the receivers profile..their wealth..

See munchinbutt , you need to read that 1st...then give out $$..

[Roy Rolling]

4. Anarchy

What kind of country asks for voluntary compliance? What is that all about? These guys don’t understand gubmint.

[bucolic_frolic]

5. Wasn't Mnuchin advising Congress on the bailout legislation?

Congress didn't see this coming? Some businesses don't need it.

They did conflicting things. They paid taxpayers $1200 to help. Everyone. Even those still working. Then they gave loans sometimes forgivable to businesses to pay salaries or other things. I doubt money made it to where it was intended - to places where abrupt drops in income, payments, receipts were needed most.

Trump lackeys Mnuchin, Kudlow, Powell are running things.

[greenjar_01]

6. "with significant endowments..."

What a vague mess of a legislation. If you didn't want a school with an $8 million endowment to receive PPP, you should have written that into the legislation. The fact is that the super genius finance bro Mnuchin is good at requiring foreclosure on the elderly, but is shit at governing, just like every other fucker in Trumpworld. So, he couldn't "foresee" this shit in this rushed and deeply stupid legislation, and so didn't build in mechanisms for Harvard and St. Andrews and other seats of privilege NOT TO APPLY or be accepted. They "should return" the PPP? Why, they don't have to make payroll? They should liquidate their endowments to make payroll first? Why? Why not write that into the legislation? Oh, right, because everybody was doing a half-assed job, and now you have a shitty law. Congratulations, genius finance bro Treasury Secretary. You fucking played yourself.

PS: Senators and Reps TOO. And those fucking people should have known better. Mnuchin at least has the excuse that he's an ignorant anti-government moron with no fucking clue how to legislate anything.

[mr_lebowski]

8. Key word 'should'. That means it's optional to return the money. (nt)