Colleges suffering from lost revenues during the pandemic may have a better chance now as clarifications to the Paycheck Protection Program’s (PPP) rules say these institutions can exclude work-study students from their final counts of employees, according to Bloomberg.
In doing this, many colleges will be able to claim that they have less than 500 employees, thus making them eligible for the PPP’s small business classification.
As the pandemic necessitated people not spend time crowded in public spaces, colleges and universities sent students home. Because of that, many institutions have had to refund room and board costs, which had them looking at financial shortfalls.
The rules were changed after protests from several lawmakers, and Congress found itself agreeing that the PPP needed to benefit colleges.
The National Association of Independent Colleges and Universities said the move isn’t going to solve problems for many schools, though, because a lot of colleges have students working on campus who aren’t funded by federal or government grants.
Those students would have to be included in the employee counts and could jeopardize standing for loan eligibility.
Covenant College, based in Georgia, will benefit from the program, according to President Derek Halvorson. The college had received a loan of $3.2 million but wasn’t sure if it was allowed to use it. The college has 129 students in a federal work-study program that can now be left out, though.
The PPP allocates loans that don’t have to be paid back if the recipients use most of the money for payroll and keeping the business open. The second round of funding, for $320 billion, was passed in late April after the first round was wiped out in days.
Colleges and universities are unsure how they will operate in the future. Everything from attending classes in-person to how to deal with pricing with the mass disruptions is up in the air.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More