Private schools, law firms among biggest PPP loan recipients in Minnesota
Private schools and global law firms based in Minnesota are among the organizations that received millions of dollars from the federal Paycheck Protection Program, known as the PPP.
Under mounting pressure from members of Congress, the U.S. Department of Treasury released a partial list of companies, nonprofits and organizations that received the money to help stay in business and pay wages during the pandemic.
According to the data, more than 13,000 employers in Minnesota received a PPP loan. An analysis by 5 INVESTIGATES shows more than 132 of those employers received between five to $10 million in loans.
Breck School, an elite private school in Golden Valley, confirmed to 5 INVESTIGATES it received a PPP loan totaling just over $5 million in order to retain more than 350 workers.
Tuition at Breck costs around $30,000 a year.
Head of School Natalia Rico Hernández said the pandemic has and will continue to impact the school’s revenue streams.
“Through the PPP, we were able to uphold our promise to maintain salaries and benefits, including for our hourly workers who were not able to perform their normal duties,” Rico Hernández said in a statement to 5 INVESTIGATES.
Breck is not the only private school in Minnesota to receive the PPP loans, according to new government data released Monday.
Blake, in Minneapolis and Hopkins, and Benilde St. Margaret’s School in St. Louis Park, both received up to $5 million in loans as well, according to the data.
Kristin Stouffer, a spokesman for Blake School, told 5 INVESTIGATES that the financial crisis has caused more of their families to request financial assistance, and some families that were planning to enroll next year have backed out.
“Of the $5 Million in PPP funds Blake received, more than 80 percent has been used to pay Blake employees. Because we have followed program requirements to qualify for loan forgiveness, we plan to seek it,” Stouffer said in a statement.
Private schools, also known as independent schools, are eligible for PPP loans, but some have criticized the schools for possibly taking money away from other, smaller businesses.
In fact, in May, Treasury Secretary Steve Mnuchin tweeted “It has come to our attention that some private schools with significant endowments have taken PPP loans. They should return them.”
Under the law, as long as all the requirements are met, the schools – like all organizations that received money – do not have to pay back the loan.
V.V. Chari, Economist at the University of Minnesota and consultant for the Federal Reserve Bank of Minneapolis, said that while some may not agree with where the money is going, it shouldn’t surprise anyone.
“The intent of the program was that even private school teachers should not be laid off because that might harm the students down the road,” he said. “All of us I think knew this was going to happen and all of us should have been aware of why the program was structured the way it was.”
Private schools are not the only organizations that may face criticism.
Monday’s release of PPP recipients also shows at least five Minnesota law firms received loans worth as much as $10 million each.
One of the biggest firms in Minnesota, Fredrikson and Byron, received a loan between five and $10 million, according to the data. Fredrikson and Byron has locations all over the globe.
The law firm said in its application that the money would help save 500 jobs.
Fredrikson and Byron did not return calls for comment.