Ernst, Grassley Seek Clarity, Relief for Iowa’s Colleges, Universities


RED OAK, Iowa—U.S. Senators Joni Ernst (R-IA) and Chuck Grassley (R-IA) are calling on the federal government to ensure Iowa’s colleges and universities are eligible for the popular COVID-19 relief program, called the Paycheck Protection Program (PPP).

Ernst and Grassley have heard from a number of Iowa’s schools who were unable to receive PPP loans after part-time student workers were counted toward the overall number of employees at the school, pushing them over the 500 employee threshold required by the program. After hearing about this issue from Iowans, Ernst and Grassley are calling on both the Department of the Treasury and the Small Business Administration (SBA) to ensure the eligibility of the state’s higher education institutions for the PPP. 

In a letter to Treasury Secretary Mnuchin and SBA Administrator Carranza, Ernst and Grassley write, “…a number of Iowa schools were unable to receive a PPP loan because part-time student workers are counted toward the overall number of employees at the school – leading many schools to exceed the 500 employee threshold (even with less than 500 full and part-time non-student workers).”

The senators go on to ask, “Preventing schools from receiving a PPP loan because they had opportunities for student workers is not fair for colleges, students, or the communities. These schools play a vital role not only in educating our state’s future workforce, but in supporting our state’s economy, particularly in rural areas. Once Congress adds funds to the PPP, I respectfully ask that you provide guidance clarifying that student workers are not counted toward the PPP’s requirement for entities to have fewer than 500 employees in order to be eligible for the loan.”

To read the letter in full, click here.

Background:

The bipartisan Phase 3 package Ernst and Grassley helped pass provides assistance to K-12 schools, teachers, higher education institutions, college students, and student loan borrowers:

  • Creates the Education Stabilization Fund, which provides funding for schools, teachers, and students, including K-12 and higher education institutions.
    • $13.5 billion for state formula-grants to go to local school districts to fund coronavirus-response activities, including remote learning technology. In order to help facilitate some of this remote learning, in the Phase 3 relief package there was $25 million for USDA Rural Utilities Service’s Distance Learning, Telemedicine and Broadband Program. 
    • Over $14 billion for higher education emergency relief.
    • $3 billion will be distributed among state governors for emergency grants for school districts and institutions of higher education that are the hardest hit by the coronavirus.
  • Waives student loan payments, principal, and interest for 6 months.
    • Students who have taken out federal student loans for school and have been forced to leave college due to the coronavirus do not have to return these funds or repay their loans.
    • Additionally, students who work part-time and are laid off as a result of the coronavirus pandemic may be eligible to receive expanded unemployment benefits.
  • Creates an incentive for employers to implement student loan repayment programs when the economy reopens.
    • This allows employers to provide up to $5,250 per year in student loan repayment for the employee completely tax-free, and is based on legislation Ernst supports.

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