Harvard is returning its $9 million stimulus check. Here's why wealthy schools got millions while others are struggling to stay open.

• After criticism from President Trump and others, Harvard University announced it will not accept $8.6 million in stimulus aid.
• Harvard, which has a $40.9 billion endowment, originally said that "100% of the funds" would go toward student financial aid.
• Payouts to colleges factor in enrollment size and the number of Pell Grants, but not the size of their endowments.
• Schools with smaller endowments, like Pine Manor College, may not survive the current economic crisis.
• Visit Business Insider's homepage for more stories.

Harvard University announced Wednesday afternoon that it would not take $8.6 million the school qualified for from coronavirus stimulus package Congress passed in March.

"Harvard has decided not to seek or accept the funds allocated to it by statute," the school said in a statement. Though it referenced "significant financial challenges," the school cited "the intense focus by politicians and others" as undermining relief efforts.

The aid has been a source of controversy, given Harvard's $40.9 billion endowment. President Trump called on the Ivy League school to "pay the money back."

"They shouldn't be taking it," Trump said at a press conference Tuesday. "I'm not going to mention any other names, but when I saw Harvard — they have one of the largest endowments anywhere in the country, maybe in the world. They're going to pay back the money."

The funding also drew ire from Republican Senator Ted Cruz, a Harvard alum. "Dear Harvard: Thank you for my law degree and an excellent legal education," Cruz tweeted Monday. "You're very rich; many people are hurting. Now give the money back."

Even Harvard epidemiologist Eric Feigl-Ding said the school shouldn't take the aid. "Harvard doesn't need $9 million in #COVID19 aid money if it has >$40 billion endowment," he tweeted on Sunday.

Harvard originally resisted Trump's call to turn down the stimulus aid, stating it was "allocating 100% of the funds to financial assistance for students to meet their urgent needs in the face of this pandemic."

On Wednesday, Stanford and Princeton also indicated that they would not accept CARE Act funding. Stanford had qualified for approximately $7 million, while Princeton was eligible for $5 million.

"Princeton, which did not request these funds, has examined whether it could use them in a manner consistent with congressional intent and guidance provided by the Department of Education," Princeton spokesman Ben Chang said in a statement. "We have also taken steps to meet additional needs resulting from COVID-19, and will continue to look for opportunities to do so throughout this crisis."

Why wealthy colleges can't just use their endowments to make ends meet

The $2 trillion Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, allocates nearly $14 billion to colleges and universities.

Education Secretary Betsy DeVos stipulated that each institution had to distribute at least half of its stimulus money directly to students, to help with food, housing, childcare, and other expenses.

"We don't want unmet financial needs due to the coronavirus to derail their learning," DeVos said earlier this month.

She had also been critical of "elite, wealthy institutions" accepting stimulus money. "Schools with large endowments should not apply for funds so more can be given to students who need support the most," she said in a statement.

But a university endowment isn't simply a rainy-day fund. It comprises many distinct accounts, each earmarked for a specific purpose, Barbara Brittingham, president of the New England Commission of Higher Education, told Business Insider.

"When people give money for an endowment, they generally direct it toward a certain source, and so it's restricted," Brittingham said. Colleges can't repurpose endowment money without permission from the state attorney general, she added.

Universities are also obligated to keep their endowments growing, to ensure a specified donation can continue to pay dividends.

The CARE Act didn't factor in the size of a school's endowment into its allotment, only its overall enrollment and the number of students receiving Pell Grants, which are federal subsidies that help those who can't afford college.

Harvard's stimulus award was less than 0.025% of its endowment. Thomas Hollister, the university's chief financial officer, told the Harvard Crimson that the endowment has shrunk "significantly" since the pandemic began, but he did not say by how much.

Not every college can weather the economic storm

Across the Charles River from Harvard, in Brookline, Massachusetts, sits Pine Manor College, a small, private liberal arts school founded in 1911 as a women's college. (It went co-ed in 2014.)

Pine Manor's endowment is currently about $27,000 per student, a fraction of Harvard's more than $2 million per student.

But the student body is incredibly diverse: Of Pine Manor's approximately 350 undergraduates, 85% are people of color, 84% are first-generation college students, and 80% received Pell Grants.

"We're one of the very few institutions who are serving such a traditionally underserved community," Pine Manor president Tom O'Reilly told Business Insider.

The college has struggled financially, even before the pandemic. In 2013, it sold off five acres of its campus to Tom Brady, who built a mansion and yoga studio on the land. The $4.5 million profit doubled the school's modest endowment, O'Reilly said.

The current crisis has cut revenue streams in half while expenses have risen, including the transition to online learning and "the huge amount of sanitizing that had to be done on a regular basis," O'Reilly said.

The $500,000 the school received through the CARES Act was not enough, "but it was meaningful to get something," he said.

With less money to fall back on, colleges with smaller endowments face an uncertain future. Franklin University in Ohio has already announced the closure of its Urbana Branch Campus. The Vermont State Colleges system may close three campuses permanently.

As for Pine Manor, the New England Commission of Higher Education said in a statement that it was uncertain whether the college could "sustain full operations at the current levels beyond the current academic year," according to the Boston Globe.

O'Reilly is cautiously optimistic. "We do persist," he said. "I'm betting that we're still going to be around and making a difference."

Still, he hopes for an additional round of aid. "It would be extraordinarily important for there to be more," he said.