Billions In PPP Loans Went To Higher Education

PPP or Paycheck Protection Program business loan as coronavirus or covid-19 aid concept — New data shows that colleges and universities got billion from the Paycheck Protection Program.

Getty

According to data released by the Small Business Administration (SBA), billions of dollars in loans have been lent to higher education institutions, organizations, and companies from the Paycheck Protection Program (PPP).

The CARES Act appropriated $350 billion for the PPP to assist small businesses. Designed to help keep workers on the payroll, the PPP provides loans to small businesses and nonprofits and a portion of the loan is forgivable. When the money quickly ran out, Congress provided another $310 billion to extend the program.

Many non-profit and for-profit colleges were eligible for the loans and decided to take them as they faced both increased costs and losses in revenue. Most small public colleges and universities were unable to take the loans because they are not for-profit companies or 501(c)3 non-profit organizations.

After weeks of demands for transparency from Congress, the SBA published the data for the businesses and non-profits that received loans. The data included companies’ North American Industry Classification System (NAICS) code and a range of the amount received. Because the SBA only disclosed a range, it is impossible to know the exact amount of each loan. The ranges are:

$150,000 – $350,000
$350,000 – $1,000,000
$1,000,000 – $2,000,000
$2,000,000 – $5,000,000
$5,000,000 – $10,000,000

The NAICS code 611310 represents those under the classification, “Colleges, Universities, and Professional Schools.” Using the data provided by the SBA for that NAICS code, a lower end estimate of the total loans received starts at about $1.08 billion. An upper-end estimate shows that colleges and universities received more than $2.54 billion.

But even the lower estimate is likely to be an underestimation. The SBA only published data for the loans that were at least $150,000. Users can download some data on a state-by-state-basis to see an exact amount for those loans under $150,000, but that does not list the business or non-profit, just the NAICS code.

Colleges of all types and sizes received the PPP money. Thirty-three colleges received loans in the largest range of $5 – $10 million. Bible colleges, optometry schools, and art institutes all benefited from the program.

The for-profit John Marshall Law School in Georgia received a loan in the range of $1 – $2 million. Hanover College, the small liberal arts college in Indiana and the alma mater of Vice President Mike Pence, received a PPP loan between $2 – $5 million.

An important caveat is that solely using this NAICS code is not a perfect way to identify “higher education.” The estimates above include companies and not just schools, even though the category name would make one believe it only includes schools. The loan data even includes some student organizations and even one Day school (possibly a reporting error).

But that NAICS code is also underinclusive. For example, the NAICS code 611519 represents “Other Technical and Trade Schools” and includes some technical and for-profit colleges that most would think of when they think of colleges and universities. particularly the ones who receive federal student financial aid like National Career College.

But even though colleges and universities received this money, along with other money solely for higher education from the CARES Act, they will likely need more relief. Colleges are predicting a drop in enrollment, and therefore a drop in revenue. On top of that, colleges will face increased costs from purchasing personal protective equipment as they try to reopen campuses this fall. The PPP loans helped colleges weather this spring, but more money will be needed for many colleges to stay afloat this fall.

Want to learn more? See the data for yourself here.