1,700 Colleges Ask Federal Reserve for Virus Loans

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1,700 universities and colleges around the nation have asked the Federal Reserve to grant them access to the Main Street Lending Program, a program established last week to provide lending to small and medium-sized businesses that have been impacted by the Chinese virus pandemic.

According to a report by Campus Reform, an organization that represents 1,700 universities and colleges around the country has petitioned the Federal Reserve for access to a lending program designed to aid small and medium-sized businesses that have been adversely affected by the Chinese virus pandemic.

Universities and colleges have already received approximately $14 billion in federal relief funds under the CARES Act, a coronavirus relief bill that was passed by Congress in March. Some wealthy universities, including Harvard, Yale, and Princeton, have rejected the funds. Other wealthy institutions, such as Columbia and USC, have accepted the funds and stated that they intend to use them to help low-income students that have been financially impacted by the pandemic.

However, most universities and colleges do not hold billions in their endowment portfolios. These universities, through the American Council on Education, urged the Federal Reserve to open the Main Street Lending Program to universities and colleges.

Institutions of higher education are often the largest, or one of the largest, employers within their community and larger region. There has been confusion about the Main Street Lending program and whether or not nonprofits are eligible, because the current guidance is silent. We ask that the Federal Reserve update the guidance to clarify that nonprofit private and public institutions of higher education, with direct borrowing authority, are eligible for the Main Street Lending program.

According to the Federal Reserve, businesses are only eligible for the Mains Street Lending Program if they meet certain requirements. “As detailed further in the term sheets, U.S. businesses may be eligible for loans if they meet either of the following conditions: (1) the business has 15,000 employees or fewer; or (2) the business had 2019 revenues of $5 billion or less,” the program’s description reads.

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