Dive Brief:

• Harvard, Stanford and Princeton universities won't accept millions of dollars in coronavirus aid amid calls from federal officials for wealthy institutions to turn down the money.

• Education Secretary Betsy DeVos said in a statement Wednesday that affluent colleges "do not need or deserve additional taxpayer funds."

• Half of the roughly $12 billion in federal assistance that colleges can apply for has been earmarked for students whom the virus has disadvantaged. 

Dive Insight:

President Donald Trump started a firestorm in the higher education sector on Tuesday following comments he made during a press briefing that he would push Harvard University to return stimulus money it received.

Congress passed the $2.2 trillion rescue package last month, setting aside $14 billion or so for higher ed. Harvard, which has a largely restricted $40 billion endowment, was allocated $8.7 million of that funding. 

After initially pledging to use all of its federal aid to help students who were financially strained by the coronavirus, Harvard on Wednesday backtracked and said it wouldn't accept the funds. It wrote in a statement that "the intense focus by politicians and others" on the university's connection with the funding could "undermine participation" in the relief program. 

It also noted "the evolving guidance" from the department, a reference to colleges' complaints that the agency did not immediately share rules for giving emergency grants to students. 

The university said it hoped the department would first consider struggling Massachusetts colleges as it redistributes the money. But as Ben Miller, vice president for postsecondary education at think tank the Center for American Progress pointed out on Twitter, DeVos doesn't have to reallocate the funding, and Harvard could have just donated the money directly to those colleges.

DeVos had said in her statement Wednesday that colleges with large endowments should not apply for their share of the funding "so more can be given to students who need support the most."

She had previously urged institutions that enrolled more financially stable students to consider donating their money to a neighboring college in need. In a tweet Wednesday, DeVos lauded Stanford for turning down the $7.4 million it was due to receive in stimulus funding.

Despite that several schools have endowments in the billions, the money is largely restricted for certain uses and only a set amount can be drawn upon annually for operating expenses. Further, endowments are vulnerable to economic contractions and schools rely on that income to varying degrees. 

Stanford tweeted that though the coronavirus has stressed the university's budget, it turned down the funding because it recognized the pandemic and its economic impact pose "an existential" threat to small institutions, which are "a critical part of the fabric of higher learning."

The university promised students they would still receive financial assistance, even though it was giving up money that could have been used for emergency grants. 

Princeton announced hours later that it would also reject the federal money, citing that the school's financial aid packages could provide "exceptional levels of support" to students. 

Princeton also noted that its aid could benefit international students, as well as beneficiaries of the Deferred Action for Childhood Arrivals (DACA) program, which protects immigrants who arrived in the country illegally as children. 

The department clarified on Tuesday that only students who are eligible for federal financial aid can receive the emergency grants — a decision that excludes international and undocumented students as well as DACA recipients, much to the chagrin of many higher ed leaders. 

Associations and colleges had complained the department was lagging on distributing the federal funding and that the process was stymied by little guidance from the department and administrative burdens. 

As of Wednesday morning, 2,960 institutions applied for their part of the $6.2 billion in student emergency grant funding, department spokesperson Angela Morabito told Education Dive. The department has given out a total of $751.3 million to 318 of those colleges, she said. So far, 137 institutions have applied for their share of the other $6.2 billion that can be used to cover colleges' costs related to coronavirus.