University Of Texas System To Use $30M In Fed Money For Students

AUSTIN, TX — The University of Texas system — which has a $30.1 billion endowment, the nation's largest after Harvard University — recently accepted $30 million in funding netted under the Coronavirus Aid, Relief and Economic Security (CARES) Act it plans to use for student needs, officials told Patch.

"UT Austin is accepting the $15 million for students and will be using it to directly support students who have been hurt by the COVID-19 crisis," university spokesman J.B. Bird confirmed in an April 23 email. "We are reviewing the other $15 million to determine whether and how to use it."

The UT system's endowment is the second most robust in the country after Harvard. Endowments represent money or other financial assets that are donated to universities or colleges earmarked as investments to grow the principal and provide additional income for future investing and expenditures, as defined by Investopedia.

Bird referred further questions to Karen Adler, director of media relations at the UT System. In response to queries from Patch, she detailed how the money is to be spent in addresssing the needs of students impacted by the corrosive effects of the new coronavirus outbreak.

"The 14 institutions of the UT System are using CARES Act funds to ensure that the emergency needs of its students are addressed," Adler wrote. "UT institutions currently enroll more than 76,600 Pell Grant recipients.At the academic institutions, half of funding will go to direct payments to eligible students to assist them with expenses incurred due to the pandemic, as intended by Congress and specified by the Department of Education. The other half will be used by each institution for direct student support and to cover costs associated with keeping students on track to complete their studies and degrees."

For context, she detailed the sheer size of the collective student body: "The University of Texas System is one of the largest systems of public higher education in the nation and incudes 14 institutions that enroll approximately 240,000 students. UT institutions educate more than one-third of the state’s undergraduates and more than half of the state’s health professionals."

The windfall comes on the heels of recent backlash after Harvard University — holder of the nation's biggest endowments among institutions of higher learning, with $40.9 billion in those coffers — accepted nearly $9 million in CARES funds. Sen. Ted Cruz of Texas was among those criticizing the Ivy League university's acceptance of the funds given its robust endowment.

“This is ridiculous," Cruz wrote on Twitter. "Taxpayer relief funds should go to those in real need. Harvard University has a $41 billion endowment—the largest in the world. Put another way, Harvard’s endowment is $13 million per student, or $171 million per faculty member.”

While expressing gratitude for the law degree he earned at the school, Cruz urged the Ivy League school to return the money:

According to the Chronicle For Higher Education, the UT System has the nation's second-biggest endowment among all universities — standing alone in the multibillion-dollar ranks among the top five list rounded out by Ivy League schools Yale, Stanford and Princeton.

Facing considerable backlash after accepting the federal funds, Harvard University officials initially vowed not to use them to cover instutitional costs, instead earmarking them as financial assistance for students.

“By federal formula laid out in the CARES Act, Harvard was allocated $8.6 million, with 50 percent of those funds to be reserved for grants to students,” Harvard University Jason A. Newton told the student-run newspaper Harvard Crimson. “Harvard is actually allocating 100 percent of the funds to financial assistance for students to meet their urgent needs in the face of this pandemic.”

After being publicly rebuked by Donald Trump for taking the funds, the school opted not to accept the federal stimulus money, joining Stanford and Princeton in turning down the windfall. In a statement, Harvard officials expressed concern "...that the intense focus by politicians and others on Harvard in connection with this program may undermine participation in a relief effort that Congress created and the President signed into law for the purpose of helping students and institutions whose financial challenges in the coming months may be most severe," as reported by the Boston Globe.

Cruz lauded the move in a subsequent tweet:

Back at UT, Adler noted the system's endowment funds wouldn't have been able to be used for student aid in any event: "Much of the endowment held by the UT System is constitutionally restricted for capital improvement (construction) projects that benefit 14 UT institutions and 11 institutions in the Texas A&M System," the spokeswoman wrote. "And, given the size of enrollment at UT institutions, the value of the endowment per student in the UT System is 10 percent or less than the value per student at the four other institutions in the nation with the largest endowments."

This article originally appeared on the Austin Patch