UW-Madison admin, student leaders clash over pandemic funds ahead of third round of funding

MADISON, Wis. — It doesn’t get much busier than a week in the life of Jessica Madley.

A junior in the University of Wisconsin-Madison’s Elementary Education program, Madley is taking six classes this semester so she can graduate early. Plus, she also works two jobs to support herself, one at a gymnastics place in a Madison suburb and one work-study position tutoring. 

Because of her family’s financial situation, she pays all her bills herself on a combination of loans, grants, and whatever she earns through work.

Her $2400 savings comes entirely from emergency financial aid grants through two federal relief packages passed last year that included funding for higher education students and institutions. It’s an account that previously was entirely empty, but she already knows what that money will pay for one day.

“That money is probably going towards my rent at some point, or food,” she said. 

Her precarious financial situation isn’t unique, either. Thousands of students have been struggling amidst the pandemic, with many picking up extra shifts, dropping out, or opting out of college entirely for the year in the face of stress or virtual learning. According to the National Student Clearinghouse Research Center, college enrollments in the fall of 2020 declined by almost twice the rate of the previous year. 

The Higher Education Emergency Relief Fund (HEERF), created in the CARES Act and funded again through a second relief package late last year, sought to ease pandemic-related financial tolls on universities and college students through money for both direct student aid and the institutions themselves. The federal government partially controls how some of that money is spent, but gives colleges a large degree of flexibility as well.

On Thursday, the money that the government requires be set aside for students ran out. For weeks, student leaders have argued that UW-Madison should be dipping into the institutional side of the funding to serve students as direct aid–money that UW administrators say is needed for expenses, because every student request has been filled.

Those ongoing tensions between the school and its student government (the Associated Students of Madison) and BIPOC Coalition over the federal funds boils down, in part, to how to divide them–and whether the school should be surpassing federally-required minimums for students.

Student, institutional financial relief

When it came to how much money schools were going to get as part of higher education COVID relief funds, it boiled down to two factors.

75% of the figure is determined by the institution’s fulltime in-person Pell grant recipients, as a share of the national total. The other 25% is based on the institution’s fulltime in-person enrollment who are not Pell Grant recipients, as a share of the national total. Pell grants are federal grants provided to those from lowest-income households.

The money also came with stipulations. For round one of the HEERF funding, at least 50% of the funds had to go to emergency financial aid for students — at UW-Madison, that was $9.9 million for students, and the same amount went back to the school. For round two, the same minimum had to go out to students, regardless of the additional funding amount. UW-Madison chose to allocate the exact same figure to students once more, opening up the grants in January, but doubled their institutional take-home to $20 million. 

Schools have discretion over the institutional portion of the funds. Last year, reports show UW-Madison used all of it–nearly $10 million-as their reimbursement for refunding students in university housing early in the pandemic. For the current round, university leadership told News 3 Investigates that they plan to use it to help cover a shortfall of $320 million in COVID-related expenses.

“This additional $20 million is just honestly a drop in the bucket, compared to the amounts that we’ve had to pay for and that we’ve incurred,” UW’s Vice Chancellor of Student Affairs, Lori Reesor, said.

Student leaders argue that all of it should be sent to students in direct aid as well, accusing UW of doing “the bare minimum” for student relief. The U.S. Department of Education, in fact, urges schools to use their institutional funds for students if they can. 

There’s other ways for universities with the resources of UW-Madison to cover COVID-related expenses that simply don’t exist for students, ASM chair Matthew Mitnick said. If anything, wealthy schools who accept the funds have an obligation to boost aid to their students, many of whom are struggling financially within the pandemic.

“The revenue generators, they’ll be able to withstand the pandemic but many students won’t, and the crippling debt that they are being placed in during this time is something that will not leave them,” Mitnick said.

While many students have got aid, he said, others say they haven’t been able to get the full amounts they’ve asked for.

Reesor said UW-Madison has provided financial aid to every student who has asked for it during the pandemic. She cited multiple other forms of student aid that the university has put in place apart from the federal funds, including 85 privately-funded crisis loans, $108,808 in additional private aid, mental health services and a campus pantry for food-insecure students.

“I think I would feel differently if we had a waitlist of students who were asking to get financial support and we’re saying ‘Sorry, we’ve run out; sorry, we can’t help you,’” Reesor said, referencing why UW was allocating federal funds for institutional COVID expenses. “That’s not been the case.”

‘We don’t have unmet need:’ How students are using relief funds

On March 18 the student portion of the latest round of federal aid ran out, according to an update on the application website. The day prior, UW estimates provided to News 3 Investigates showed about 93% of the $9.9 million had been distributed to 8,438 students, or about 18% of the total student population. 

Students say the emergency grants are going towards the bare necessities: food and rent. For Madley, there’s no question that more money would’ve been helpful.

“I would definitely have loved more money,” she said. “It definitely helps with security around food and stuff like that.”

Madley’s hardships aren’t an uncommon story right now. Mitnick says students are spending their aid “for cost of living, basic necessities to be able to be a student here.” He said students were dropping out, struggling to pay their rent, or moving back home during the pandemic — noting that about 250 students withdrew last fall and around 150 deferred, and estimating that several thousand were struggling financially by the end of the semester.

Enrollment for the 2020-2021 school year was marginally higher than the former year, but the rate of increase dropped from 2% to .05% when comparing between the last three school years. Data on student drop-outs was not available for this school year from the Office of Student Affairs. But spring enrollment overall, the office noted, was on par with past years with a re-enrollment rate for the spring semester of 93%.

“I’m going to pay rent with it,” UW-Madison business student Shayde Erbrecht said with a chuckle. “It doesn’t even cover two months of rent, but like, sure. It’s two months I don’t have to worry about.”

Pell Grant students automatically got $1,000 from the second federal round deposited in their accounts, and could apply for more if needed. Mitnick said not everyone had been able to receive full additional requests, and the concern is long term: “If the average student is receiving between $500 to $1500, that’s just a short-term fix.”

Congress just passed its third coronavirus relief package, which will send another $40 billion to students and institutions. Anticipations of further direct aid for students is one reason the university has chosen to use this current round for university expenses, Reesor said.

“We don’t have unmet need,” Reesor said. “Knowing that we have another round of stimulus coming, I think we’ll be able to meet those needs through those additional stimulus funds, which we’re really grateful for.”

Tension between student leaders, administrators

In ongoing clashes with administration, student leadership says they’ve struggled to get transparency on this and other relief funding issues from the university. 

When ASM and the BIPOC Coalition asked for clarity from the university about where the tens of millions of dollars in institutional aid was being spent, Mitnick said he was given the runaround, being directed to the financial aid office who then directed him right back to the Vice Chancellor for Finance and Administration. 

Recordings of those meetings reveal tension and frustrations as students tried to find additional avenues for financial relief and get the plan for how the university plans to spend its $20 million. In a March 17 interview with News 3, Reesor said the university still has not finalized that plan, in part due to waiting on federal guidance. 

“We have not made any decision about what we will do with it,” Vice Chancellor for Finance and Administration Laurent Heller told students in a February study group with other student leaders.

“UW is allocating the bare minimum allowed by the federal government,” an ASM press release stated in February.

How other campuses spent federal relief

Other Big Ten institutions used institutional funds from their first round of federal funding as student fee refund reimbursements alongside UW-Madison; some have gone a step further with the second round funding–the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA)–as well. 

Reports from the University of Minnesota-Twin Cities show they used their CARES Act funds similarly for reimbursing student tuition or housing and further direct aid, in addition to emergency grants. The University of Michigan opted to direct their institutional funds towards other COVID expenses, while sending the federal minimum to students.

The Ohio State University is cutting into their own institutional funds from the second round of federal funding under CRRSAA, sending another $17.7 million to students on top of the federal minimum of $21.4 million. 

Other UW System schools stuck with their federally required student aid minimums however, including UW-Milwaukee, UW-Green Bay, and UW-Oshkosh.

Some UW institutions took a different tack. UW-La Crosse allocated an additional $633,116 from its institutional funds to students in round one, meaning almost 60% of their HEERF I funding went right to students. More than $2 million more went as reimbursement for tuition and housing refunds. 

Endowments and institutional losses

The third round of federal funding passed under the Biden administration includes a prioritized spending formula for schools with endowments under $1 million, a bar all 13 UW System main campuses surpass. UW-Madison’s endowment doesn’t even count in the millions — its most recently reported value was well over $3 billion. 

Institutional losses have been substantial. Based on loss estimates for up to the end of summer 2020, UW-Madison was set to lose about $118 million, or 11.75% of their entire 2019-2020 budget. Currently, the university estimates losses in the range of $320 million. UW administrators argue that a large endowment doesn’t equate to providing a failsafe for funding shortages.

“Many of those funds are allocated by donors for specific projects, specific initiatives, specific scholarships and programs,” Reesor said. It’s not an open fund that we can use for whatever, whatever we want.”

But prioritization on lower-endowment schools goes beyond the Biden administration, too. Former Secretary of Education Betsy Devos sent a letter last year asking rich schools to turn down the money, stating “schools with large endowments should not apply for funds so more can be given to students who need support the most.”

Students left out, ASM says

Under a shifting understanding of whether DACA and undocumented students would be eligible for HEERF, UW has played it safe in deeming them ineligible for federal aid. 

Schools have been extensively debating whether funds from Biden’s administration can be allocated to those groups, with some choosing to do so, some launching and winning court cases in attempts to do so, and others stating it’s illegal to do so but opening up university coffers to aid those students.

UW is using private funds and crisis loans for students in that category; more than $180,000 in private funding and another repayable 85 crisis loans of $500 or less have been given out to all students during the pandemic according to data provided to News 3 Investigates.

But they’ve also blocked a $2 million student fund using student’s segregated fees, telling student leadership that using the funds in direct aid is illegal, under UW policy and state law. 

“It’s just been embarrassing how they’ve handled this and they are making policy choices to, one, construe federal guidelines conservatively and not give access to aid to the extent that they could,” Mitnick said.

UW leadership pushes back on that characterization, saying that while the tensions have been ongoing, no student has been left behind.

“While we are not able to use the $2 million that they had in their reserves for those purposes, we would certainly hope and encourage them to think of other services that our students might need,” Reesor said. “We’ve been able to get financial aid or federal aid to support our students, and we’re using our own private funds to support our students.”