Haves and Have Nots: Elite Brooklyn Private Schools Rake in Millions in Federal Paycheck Aid-DOE Budgets Slashed

Gothamist reports elite Brooklyn Heights private schools are among institutions that received millions from the Federal Paycheck Protection Program (PPP). Private schools are eligible for PPP because they are considered non-profit businesses. According to data released by the Small Business Association, St. Ann’s, Packer Collegiate, Brooklyn Friends, and Brooklyn Heights Montessori all received loans. This money is in addition to CARES Act funding.

While exact amounts are unavailable from the SBA, Packer, and St. Ann’s reportedly each received PPP loans of $5 – 10 million dollars each. Brooklyn Friends received $2 – 5 million in PPP and Brooklyn Heights Montessori School $1-2 million. The loans have a 1% interest rate and, per Gothamist, “are eligible to be forgiven if the money is used on payroll, interest on mortgages, rent, and utilities.”

DOE Budget Crunch

In contrast, NYC public schools got smacked with the short end of the financial stick. The DOE was slated to receive $717 million in CARES Act funding. However, recent changes proposed by U.S. Department of Education Secretary Betsy DeVos could cost NYC’s schools over $100 million. As a result, Gothamist reports, NYC has joined a lawsuit which “charges that the federal Department of Education is violating a federal education law called Title I.” On the Federal level, public schools are not eligible for PPP.

The pandemic has also saddled New York City with a $9 billion dollar overall revenue shortfall. Speaker of the Council, Cory Johnson described the passage of the 2021 Fiscal Year budget on June 30th as “heart-wrenching” and “full of impossible choices.” The Department of Education budget took a $462.9 million dollar hit with most of the cuts to “fall on classroom instruction, according to an analysis by the Independent Budget Office” reported ChalkBeat. For a complete breakdown of the DOE budget click HERE.

Special Needs Funding Squeeze  

Less widely known is that schools will also suffer a shortfall of Fair Student Funding, the monies a school receives per student based on their individual needs. Families waiting to have their children evaluated by the DOE as part of the IEP (Individualized Education Plan) process are in limbo and ultimately so is the funding they may be granted through the process.

The DOE halted all in-person during the shutdown. They cannot be conducted effectively online or by video. No evaluations mean no diagnoses. Without it and the subsequent IEP meetings with the School-Based Support Team (made up of teachers, social worker, school psychologist), a student struggling with learning challenges cannot receive their services.  As such, their school won’t receive the necessary additional funding to cover the costs for the coming academic year. Furthermore, most schools are not even funded 100% of their Fair Student Funding each year, to begin with.

It will be up to Principals and their School Leadership Teams (SLT) to determine how and where to cut expenses within the operating budget to ensure kids receive what they need. This places impossible pressure on individual schools, especially those in poorer, under-served neighborhoods. IMG_6915Inequities Magnified by Pandemic

The pandemic has laid the achievement gap bare within the DOE, the country’s largest and most segregated school system. NYC’s public schools serve 1.1 million children. According to Columbia University’s Bank Street Graduate School of Education, two out of five children in NYC live at or close to the poverty line.

The Return to School 2020 website lists greater equity among the DOE’s guiding principles. “We will not look away from the ways this virus has further magnified the effects of systemic racism in our communities. We will continue to explore opportunities to directly correct structural inequities—like closing the digital divide.” And, the blog will continue to report on how COVID impacts Education.

CORRECTIONS: This article has been updated to replace an incorrect link to Gothamist and reflect private schools are non-profit and not “for-profit” businesses.

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  • Banet

    You say “Gothamist reports” but link to an article on Chalkbeat.

  • Susan O’Doherty

    This shouldn’t be surprising, but it is still deeply distressing that once again we are taking care of those who need it least and leaving the have-nots to fend for themselves.

  • Cranberry Beret

    The private schools are non-profits, which were eligible for PPP loans. The statement that they’re “for profit” businesses is wrong.

  • SongBirdNYC

    Thanks, I’ll fix it.

  • SongBirdNYC

    Thanks, I’ll edit.

  • Slyone

    Not to undermine the overall point about DOE schools getting hit financially at exactly a time when they need more money, but the City Council did restore the proposed $100M cut in Fair Student Funding, so whatever proportion of FSF a school had received historically, it is slated to receive for the coming year (the point about not all schools historically receiving 100% of the FSF they are supposed to is dead on, though!). At least for now — we keep hearing about how budgets could be adjusted up or down this year. Specific cuts I have seen/heard about so far are to college access funding for middle and high schools (can fund things like SHSAT prep for all students), wellness inititaive funding (ironic), reductions to no-cost after school programs, and teacher choice funds (which teachers can use to pay for supplies).

  • SongBirdNYC

    Ah, thanks Slyone! I’ll look for an article on that and update this post. Schools are still screwed though when it comes FSF for special needs services though.

  • SongBirdNYC

    And yes, that was exactly my point. Public schools cannot benefit from PPP only CARES Act funds whereas private schools can.

  • aeshtron

    Bravo to SongBirdNYC for a well-written and informative piece on this important topic. Thank you!

    Support public schools : )

  • Henry

    Thank you, Private Schools, for having the foresight to apply for PPP loans to bring much needed Federal funds into our communities during a time when Washington and the Trump Administration are so vocally vilifying New York. Since our state and local government’s, and therefore our DOE, are being shunned for Federal aid despite significant revenue lapses, any funds, that by their design must largely be used to pay teachers, administrators, and support staff salaries in order to be forgiven, inevitably will flow into and help our community. At a time when many people are hurting across the country, when resources are scarce, any funds, agnostic of business, HELP! The DOE did not qualify for these funds so if the private schools did not apply, some other entity, including a private school in some other state, could have received them. It’s ONE New York during this time of Covid, we’re all in this together, so please stop with this divisive journalism.

  • Millie

    As always take care of the wealthy, let all others be sent to jail. Pipeline to prison when black and brown go without proper education.

  • SongBirdNYC

    Well thank you for calling my piece journalism. The post is factual and pointed out contrasts between what is available to private schools vs. public schools. It also shines a light on the how the impact of COVID is widening the academic divide between students who live in poverty and those who don’t. Why and how is that divisive? Me thinks you doth protest too much.

    Private schools are not obligated to serve children with special needs. The DOE is mandated to do it. And for that you need money. Where is that funding supposed to come from if it hasn’t been budgeted for?

    I agree with you it’s ONE NY. Every child deserves access to a quality education whether rich or poor.

  • CHatter

    PPP loans go to employees (here, that means teachers, teachers aids, administrators, janitors, security guards, etc) so that their employers are dissuaded from firing them. Why does it matter to you if they are teaching in public schools or private schools? The schools themselves are not “raking in” anything.

  • gc

    You say “PPP loans go to employees”.
    If only it were so….
    In fact, the loans go to the employers and then hopefully some of the loan eventually makes its way to the employees.

  • CHatter

    Yes, obviously the proceeds are remitted to the schools that apply for the loans. The majority of those proceeds must however be used to fund payroll (other permitted uses include rent and mortgage expense, but there are limits on those uses) in order to be forgivable. Again, all uses that pay directly or support teachers and preserve their jobs. What is bad about that? Would you prefer those funds go to an internet startup that’s looking for yet another way to disrupt the Viagra supply chain? I have a kid in public school and am certainly disheartened by fiscal response to the pandemic, and in particular the exclusion of public schools from PPP eligibility (thanks a lot DeVos), but I’d have to be some kind of monstrous jerk to suggest that the consequence of that decision should be to jeopardize the livelihoods of other teachers just because their employer is an independent school.

  • B.

    I do not think that money going to private schools finds its way into the pockets of “employers.”

    Trustees, on the contrary, put their hands into their own pockets to create, say, new chemistry labs. And they spend weekends convincing others to do so as well. Heads of school are themselves on fixed salaries — some of them, admittedly, high.

  • SongBirdNYC

    Private schools charge tuition and fund raise relentlessly. I understand anecdotally that the private schools have NOT pro-rated or refunded any kind of tuition since teaching went virtual. Some of the schools have hefty endowments as well. Packer’s, as of 2019 was over $36 million, yet they received between 5 and 10 additional dollars. These loans are not available to the public schools which are chronically underfunded to begin with. The budgets have been updated since this post ran last week. NYC DOE is now looking at a 700 million deficit. So, private schools should get bailed out when our public schools have been neglected? I’m not in favor of any teacher’s positions being jeopardized. If any of these private schools are in that position right now there is something wrong with how they run their non-profit. With the exception of Brooklyn Friends. I understand they don’t have an endowment, that a lot of their reserve is used for scholarships. But, the point of my post was to emphasize how the pandemic will further impact children in public schools-especially those with learning challenges or live in poverty. Not to suggest that teachers and staff shouldn’t be compensated.

  • Cranberry Beret

    Not disagreeing with the overall thrust that public schools should be getting aid, too. But it helps to argue accurately. Most if not all private schools cannot use their endowments to pay operating expenses like salaries or rent. (Of course it’s a different societal problem why people are allocating so much in donations to build up these endowments, which serve to over-capitalize these schools with fancy lab and sports facilities when public schools are under-capitalized.) So if their operating income dries up or threatens to (tuition, aid, donations, camp fees, etc), they need to cut operating expenses (which could be salaries). Just like any other entity does.

  • gc

    Not sure exactly what your point is relative to my comment.
    Nowhere did I say that money was finding its way into employers pockets. My point was that the vast majority of PPP funding should be finding its way into the workers pockets.

  • CHatter

    And those are, in fact, exactly the rules (otherwise the funds have to be repaid).

  • gc

    The rules, as I understand them, call for at least 60% to be spent on payroll. In my opinion that is far short of what it should be.

  • CHatter

    That would be nice! The requirement was reduced from 75% to 60%, as you may already know, because many employers were uncertain if they could retain employees that would be better off with 600/mo in unemployment. So they were faced with the agonizing choice between returning ALL the funds (so no employees would benefit from the PPP loans at all) or facing future enforcement actions for failure to conform to the 75% rule.

  • CHatter

    Ok. Your quarrel, then, is with the CARES Act and PPP eligibility rules (and I concur, enthusiastically, that the legislation needs improvement). I cannot understand why you decided to make that point via a hit piece that “names and shames” PPP borrowers that are, after all, the intended beneficiaries of those programs. Cannot understand it or condone it.

  • gc

    I think you may miss the depth of frustration many of us share with an education system that is so unequal.