TCU was shamed into rejecting $5.7 million in CARES Act funding because we were “rich.” That was a mistake that should be fixed.
At a virtual town hall meeting this week, TCU Chancellor Victor Boschini addressed several questions submitted from faculty and staff, nearly 900 of whom attended the session. One was a question that I and several others submitted, about the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provided $14 billion in allocations for higher education institutions.
Chancellor Boschini’s response was a bit of a surprise. Here it is, verbatim:
“A lot of people asked, why aren’t we spending the money we got from the government in COVID-19? OK, here’s why. Because we didn’t take any money from the government in COVD-19. They had an allocation of $5.6 million that we could’ve taken, and half of that money was to be spent on our students, and half of that money was to be spent to cover things on campus for faculty and staff that were as a result of COVID-19. But right before we pressed the button to accept that money, we were shamed into not taking it. And, so, basically, what happened is, there was a movement afloat where they said, if you are a rich school, how dare you take this money? Well, I think that that’s kind of ironic because half of that money was going to the students, not to TCU, so it would’ve helped students who need the money. And so it’s not like they’re rich. And so basically we didn’t accept any of that money and we probably won’t. We still are eligible for it, but we probably won’t. And if you’ll notice y’all, a lot of schools that accepted it had to turn around and turn it back in after they were shamed, or shamed into it, whatever. That’s my word.”
There’s a lot going on there. Some statements that deserve attention:
- The amount TCU was eligible to receive was a bit higher; $5,728,641, to be exact. Indeed, half of that would be to address student needs related to the pandemic.
- One of the reasons for potential shaming is that we are a “rich school.” Perhaps we are. Our endowment ($1.5 billion) is at best on par with our peers. Yet we are currently going through massive reductions well beyond our peers, with the university ordering operating budget cuts of 20% ($155 million) for the upcoming year, with half of those permanent, and another 10% on the table as well. The board also has permanently cut retirement benefits by 30% for all employees.
- A lot of schools that accepted funds had to return them? Maybe. Only a handful rejected CARES Act money — and the private schools that did are in far better financial shape than TCU is.
So, is TCU really a “rich school,” as the chancellor asserted our image is? With a steep price tag for tuition (now more than $50,000 a year), a Division I athletic program with powerhouse football and baseball teams, and a fleet of luxury cars driven by students on campus, it certainly can seem that way. But compared to our peers, we’re not really that rich.
We do pay our chancellor and officers as if we are rich, ranking well above our peers of the amount of revenue we dedicate to their compensation. But faculty compensation is nearly in the bottom quarter of our peers, as Dr. Andrew Ledbetter pointed out in this report.
Among Big 12 schools, we are competitive financially, with the fourth-highest endowment of the 10 programs, trailing only Texas ($31 billion), Kansas ($1.8 billion) and Oklahoma ($1.7 billion). But every single program in the Big 12 accepted CARES Act funds except for TCU. And while TCU was eligible for $5.7 million in funding, every other program accepted about twice that amount or more. Only Baylor ($10.77 million) was anywhere near TCU’s offered amount. And they took that money and used it for students and other needs.
How about compared to our peers? These self-identified 10 schools — American University, Baylor, George Washington, Pepperdine, Santa Clara, SMU, Syracuse, Tulane, Villanova and Wake Forest — are private schools similar to ours. Endowments range from $720 million on the low end (American) to $1.7 billion at the top (George Washington), and we’re right there in the middle. Every single one of those 10 schools accepted CARES Act money as well.
So, who did reject CARES Act money that we compare ourselves to?
The chancellor was likely referring to this story from Politico, which pointed out that “elite” programs such as Harvard, Yale, Stanford, Penn and Princeton were not accepting federal aid for the pandemic. The pressure came from the president, members of Congress, and even Secretary of Education Betsy DeVos, who said:
“Schools with large endowments should not apply for funds so more can be given to students who need support the most…It’s also important for Congress to change the law to make sure no more taxpayer funds go to elite, wealthy institutions.”
TCU has also compiled a list of “aspirant” institutions — whom we would like to be. These 10 schools are not in the Ivy League, but they include Stanford, as well as Duke, Emory, Georgetown, Northwestern, Notre Dame, Rice, Southern Cal, Vanderbilt, and Washington University. Half of those 10 schools rejected CARES Act funding, but financially, they have little in common with TCU.***
The endowments of these five programs — Stanford ($27.7 billion), Notre Dame ($13.8 billion), Northwestern ($11.1 billion), Duke ($8.6 billion) and Wash U. ($7.9 billion) — dwarf the TCU endowment ($1.5 to $1.6 billion, according to the vice chancellor of finance, who also participated in the virtual town hall). The other five programs in our aspirant list have endowments ranging from almost equal to ours (Georgetown, $1.6 billion) to almost five times ours (Emory, $7.8 billion). They all took CARES Act money.
According to the chancellor, we still have an opportunity to claim those funds, to help our students and to help us in our current financial crisis. Brian Gutierrez, the vice chancellor for finance, said losses due to the pandemic were about $56 million, largely stemming from about $20 million in “at risk revenue” from potential losses from football ticket and parking sales and declines in giving, but also including $11 million in costs associated with preparing the university for online teaching and safe in-person teaching, and housing and dining losses from the spring semester.
Students who need help either aren’t receiving it, or they are receiving it because TCU is taking that money from other funds to pay for it. If even half of the CARES Act funds we received were put toward our losses and fall prepardness, we would be in better financial shape.
Instead of permanently cutting retirement for all TCU employees or cutting the budget by $155 million this year, TCU leadership should consider accepting funds that are there for us in this crisis. There is no shame in being financially responsible and accepting the help created exactly for this purpose. We are not Harvard or Stanford or Duke, and we can’t pretend we have their endowments to help us in this time. It is good for the entirety of the TCU community, from students to faculty to staff to leadership.
The chancellor concluded the call by saying his primary goal was “to keep all of us getting a paycheck every month, and to keep everybody on the island currently employed.” Accepting funding designated to help us through the COVID-19 crisis is one way to help him meet that goal.
*** This is a correction from the original post, which did not note that Notre Dame had decided against accepting CARES Act funds. See sources below.
Sources for CARES Act funding
Big 12 Universities
Iowa State: https://www.financialaid.iastate.edu/cares-act-report/
Kansas State: https://www.k-state.edu/k-publisher/preview.php?preview=1&id=64687
Oklahoma State: https://go.okstate.edu/coronavirus/latest-announcements/cowboy-cares-grant.html
Texas Tech: http://www.depts.ttu.edu/financialaid/cares-act/
West Virginia: https://wvutoday.wvu.edu/stories/2020/05/20/wvu-awards-emergency-grants-to-students-for-spring-announces-cares-act-emergency-grants-for-summer
George Washington: https://campusadvisories.gwu.edu/federal-cares-act-funding-students
Santa Clara: https://www.scu.edu/covid-19/cares-act-relief-fund-faqs/
Wake Forest: https://inside.wfu.edu/2020/05/cares-act-information-for-faculty-and-staff/
Duke (rejected CARES Act $): https://www.dukechronicle.com/article/2020/05/duke-university-why-did-reject-million-cares-act-funding
Northwestern (rejected CARES Act $): https://dailynorthwestern.com/2020/04/28/campus/university-rejects-8-5-million-allocated-through-cares-act/
Notre Dame (rejected CARES Act $): https://www.southbendtribune.com/news/education/notre-dame-turns-down-5-8-million-in-stimulus-money-amid-endowment-criticism/article_ba0d9fb0-8fa8-11ea-a948-2b29753c37c5.html
Southern Cal: http://www.uscannenbergmedia.com/2020/04/14/usc-to-distribute-at-least-96-million-federal-emergency-grants-to-students-financially-impacted-by-covid-19/
Stanford (rejected CARES Act $): https://news.stanford.edu/2020/04/22/stanford-university-statement-relief-funds-cares-act/
Washington University (rejected CARES Act $): https://www.ksdk.com/article/news/local/business-journal/washington-university-cares-act-funding/63-11a4430b-1698-4936-8772-91ae4303c2dd