More than $54 million in PPP loans went to small private Texas colleges and universities

More than million in PPP loans went to small private Texas colleges and universities

Some small private and for-profit Texas college and universities received Paycheck Protection Program loans to stay afloat and meet payroll.
Some small private and for-profit Texas college and universities received Paycheck Protection Program loans to stay afloat and meet payroll.
Tamir Kalifa for The Texas Tribune

More than 40 small private and for-profit Texas colleges and universities received a combined tens of millions of dollars worth of Paycheck Protection Program loans this spring, helping them stay afloat and meet payroll during the coronavirus pandemic.

The program was established by the federal CARES Act to assist small businesses in keeping their employees on the payroll as businesses and schools shut down across the country. The recipients ranged from relatively well-known schools — Austin College, Huston-Tillotson University and the University of Dallas — to for-profit institutes and vocational schools like American College of Acupuncture & Oriental Medicine Inc. and Peloton College. None of the state’s public schools or largest private schools were eligible for the loans, though they have received other forms of federal aid.

The loans were disclosed Monday by the Small Business Administration, which did not provide precise amounts of money each university or college received. Instead, the agency disclosed a range of loan amounts that were given to each eligible business. Those ranges indicate that the Texas schools received at least $54 million combined.

Most of the Texas colleges and universities that received PPP loans did not immediately respond to The Texas Tribune’s request for comment. But those that did said they used the money to meet payroll and avoid layoffs.

Our Lady of the Lake University — a private Catholic university with campuses in San Antonio, Houston, and the Rio Grande Valley — received $6.6 million in PPP loans in March, according to university President Diane Melby.

“It covered about seven to eight weeks of our payroll expenses, which allowed us to avoid laying off personnel during the first eight weeks of the crisis,” Melby said.

Sixty percent of Our Lady of the Lake students are low-income, according to Melby, and most of them receive federal Pell Grants. Ninety-eight percent receive some form of university-funded financial aid.

“We were providing the students with a lot of financial help, and we are a very lean organization, we don’t have a lot of money anyway so we would have been immediately in a situation where we would have needed to lay off employees,” Melby said.

The PPP funding helped the school keep about 400 employees, Melby said, including some of the university’s workers that were most at-risk of losing work or contracting COVID-19.

“The employees that are most vulnerable on our campus are the lowest wage earners, our facilities departments, our housekeeping departments, and our direct line employees,” she said. “They’re also the employees that live closest to our West Side campus [in San Antonio], which means that they live in one of their most vulnerable communities in all of Texas.”

Melby added that the funds particularly helped older employees were also disproportionately at risk of contracting COVID-19. Even though only a few of those employees could work in-person or remotely, the PPP loan helped those that couldn’t stay on the payroll, Melby said.

“That was the most gratifying outcome of the PPP,” she said. “That’s why we were so certain we were going to apply for one.”

McMurry University, a private Methodist university in Abilene, also said the $2.5 million it received in PPP funds helped it avoid layoffs, furloughs, and pay cuts.

“PPP funds were vital and kept our workforce employed during April, May, and June after the University had refunded students,” Lisa Williams, McMurry’s vice president of finance and administration, wrote in a statement. “As of today, McMurry has not had to furlough, reduce staff, or cut salaries due to the PPP funds.”

Schreiner University, a private Presbyterian university in Kerrville, said that while it had already paid out student employees who could not work remotely after the pandemic began, the PPP was helpful in preserving the payroll of non-student employees.

“The financial impact of the pandemic was significant to Schreiner University, and it is likely to be of ongoing significance,” said Toby Appleton, a Schreiner spokesperson. “PPP funding helped us mitigate about 1/4 of the financial strain on the University.”

Both Our Lady of the Lake and McMurry are making financial adjustments in preparation for the fall 2020 semester, and said the PPP loan came in handy by providing a financial cushion as universities plan their operations for the upcoming semester in the face of volatile circumstances.

“I just think that for institutions like Our Lady of the Lake, and in our situation, it has been absolutely instrumental in being able to keep people employed during their early onset of COVID, and we couldn’t have done it otherwise,” Melby said.

Disclosure: The Texas Tribune, as a nonprofit local newsroom and a small business, applied for and received a loan through the Paycheck Protection Program in the amount of $1,116,626.

Source: Texas Tribune