Independent Schools Consider Applying for Paycheck Protection Program Loans

By Tucker Gibbs, Andrea Luo, Krish Patel and Safira Schiowitz

The COVID-19 pandemic has posed economic challenges for many private educational institutions across the country. In response, the U.S. federal government has offered schools economic support systems to assist faculty and staff members.

In the past months, various federal and state agencies have developed programs to aid private institutions, including private schools, in continuing to pay their employees. The most well known of such initiatives is the Paycheck Protection Program (PPP). The PPP is funded by a COVID-19 relief package from Congress and is administered by the Small Business Administration (SBA). 

Restrictions on eligibility for the PPP failed to cover small business exclusively, and multinational corporations such as Shake Shack and Potbelly took advantage of requirements to secure multimillion dollar loans. Soon after, public backlash ensued, and the loans were returned.

Several private schools also took PPP loans, such as Sidwell Friends and the Pingree School, despite managing significant endowments. “It has come to our attention that some private schools with significant endowments have taken #PPP loans,” Secretary of the Treasury Steve Mnuchin said in a tweet. “They should return them.”

Exeter does not qualify for a loan due to its employment size. “The Academy has not applied for or received nor do we intend to apply for or receive PPP loans. We do not qualify for PPP loans because we employ more than 500 employees,” Chief Financial Officer Marijka Beauchesne said.

Peer schools have considered accepting government loans. Like Exeter, however, some are not eligible for the loans due to their size or believe that the loans are not needed at this juncture. “We spent a lot of time discussing with our board of trustees and after some discussion, we chose not to apply at all, even though we were eligible. And I know that some schools have, and I respect that,” Headmaster of The Lawrenceville School Stephen S. Murray said. 

“I guess I wouldn’t say we would never do it, but our general posture is that that’s not really what those funds are for,” Murray said. “We have other resources and ways that we can protect our employees and find a way that navigates the challenges.”

Other peer schools have chosen to not accept government assistance as well. “Hotchkiss is not participating in the PPP program, nor are we seeking any federal financial assistance,” Hotchkiss Chief Communications Officer Hope Cobera said.