The New York Times. April 04, 2020

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Tracking an OutbreakU.S. Response

first-served basis — they flooded
banks with calls and emails as
they tried to get to the front of the
“I’ve been up all night,” said
Jeremy Resnick of Jacksonville,
Fla., who runs several businesses,
including a real estate brokerage
and a chain of ice cream stores.
“They put out these rays of hope
for people, and the reality behind
it isn’t there.”
The frenzy played out against
the backdrop of yet another grim
unemployment report. On Friday,
the Labor Department said em-
ployers shed 701,000 jobs last
month — the biggest monthly
drop in more than a decade, end-
ing a landmark 113 months of job
creation. And nearly 10 million
people applied for unemployment
benefits over the previous two
Some of their former employers
view the relief program, called the
Paycheck Protection Program, as
a potential lifeline. Companies
with fewer than 500 workers have
slashed millions of jobs in recent
weeks as restaurants, bars, retail-
ers and other Main Street busi-
nesses across the country were
ordered to shut their doors.
The program offers such com-
panies loans of up to $10 million,
which can be forgiven if the busi-
ness uses the money to retain
workers for eight weeks or rehire
for positions it cuts in the wake of
the pandemic. The Small Business
Administration is backing the
loans, but customers must apply
through banks or other lenders.
Bank of America was the first
big bank to begin taking applica-
tions, and it had around 10,000 by
early Friday, Brian Moynihan, the
bank’s chief executive, said on
CNBC. By evening, its loan re-
quests totaled $22 billion, a
spokesman said.
But many Bank of America
customers were dismayed to find
that the lender would not work
with them because they had only
accounts, and not loans, with the
bank. The bank said it was accept-
ing applications only from
customers who had both “a pre-
existing business lending and
business deposit relationship” as
of Feb. 15.
That eliminated Tamara Alex-
ander and her business in Hous-
ton, which provides behavioral
therapy for children with autism.
With 13 employees, Ms. Alexan-

der is struggling to stay afloat
with just a trickle of clients who
can connect over video chat.
She went to her Bank of Amer-
ica branch on Friday morning
with high hopes. But although her
banker had assured her the day
before that she could get a loan,
she was told that only those with
an existing loan or credit card
would be eligible.
“We kind of bootstrapped our
way to our business — thankfully
we haven’t needed to acquire any
debt,” Ms. Alexander said. “The
one bit of help we need, we can’t
get. And coming from our own
bank, it’s just so stressful.”
Dean Athanasia, the head of
Bank of America’s consumer and
small business group, sent a
memo to employees on Friday
pledging to “enhance” the pro-
gram soon “to accommodate more
and more of our small-business
But even customers with previ-
ous loans were struggling. Melis-
sa Perri, who runs a software con-
sulting firm, ProdUX Labs, in
New York that employs six peo-
ple, has for years had a business
bank account and a $42,000 line of
credit with Bank of America, she
said. But when she tried to apply
on Friday, she got a message that
said she was denied because she
did not have a credit card.
“I was pretty frustrated,” she
said. “I said: ‘I have multiple ac-
counts with you, and I’ve been
banking with you for years. How
is this possible?’ ”
Bank of America said on its
website that a “business credit
card, line of credit or loan” would
all qualify. That should have made
Ms. Perri eligible. A spokesman
said the bank would look into her
Other large banks imposed sim-
ilar requirements.
JPMorgan Chase said it would
take applications only from people
who had a business checking ac-
count with the bank as of Feb. 15. A
notice on Wells Fargo’s website
said it, too, required an existing
business checking account. Citi
has not yet announced its rules; a
spokesman said it was reviewing
the program’s rules and planned
to start accepting applications “as
soon as possible.”
Hundreds of business owners
complained on Twitter that they
were ineligible for their bank’s
program or that it had not yet
started accepting applications.
The National Federation of Inde-
pendent Business said many
feared they would be shut out of
the aid effort.
“This has the potential to be the

last straw for many small busi-
nesses and their employees,” it
Adding to the pressure: Many
expect the program’s $349 billion
lending pool to run out unless Con-
gress allocates more money. “If
we run out of money, we’re going
to go back to Congress and get
more money for small business,”
Mr. Mnuchin said on the Fox Busi-
ness Network on Friday.
The Treasury Department had
hoped to bring nonbank lenders
into the program, but as of Friday,
the government had not even re-
leased an application that would
let financial technology compa-
nies apply to participate, industry
executives said.
Stephen D. Steinour, the chief
executive of Huntington Bank, a
lender in Columbus, Ohio, said his
staff had worked all night to get
the bank’s website ready to start
taking applications online by late
Friday afternoon.
Mr. Mnuchin said banks would
be able to approve applications
and send borrowers money “the
same day.” Mr. Steinour said he
thought a same-day turnaround

would be possible in a few weeks,
but not immediately. He expects
to have his bank’s first batch of ap-
provals — and borrowers’ checks
— ready by early next week.
Lenders struggled with opera-
tional issues throughout Friday.
Chase’s website for the pro-
gram returned error messages at
times in the morning, leading
many aspiring applicants to as-
sume it had been overwhelmed.
A Chase spokeswoman said
that the site had not crashed and
that it was taken offline for up-
dates. The bank started accepting
loan requests shortly after 1 p.m.
One would-be borrower was
Anne Lanier. She and her husband
had been working the phones
since Thursday looking for a bank
to lend them $11,000 to keep pay-
ing the five employees of their
Brooklyn bar, Black Rabbit, which
closed on March 16.
Without immediate help, the
couple will be out of business. But
the last time they borrowed
money for the bar was 13 years
ago, from a local bank that has
long since discarded the paper-

Lenders that Ms. Lanier found
on the S.B.A.’s website said they
were dealing only with existing
customers. The couple turned to
Chase, which provides them a
business checking account. On
Friday afternoon, they submitted
a preliminary loan request with
their business name, tax identifi-
cation number and contact infor-
mation, and received a message
saying a Chase representative
would contact them. At the time of
this article’s publication, they
were still waiting.
Some of the features that were
supposed to make it easier for
banks to quickly ramp up lending
through the program may actu-
ally make it harder for people who
need the money to get it.
Participating banks are pro-
tected from liability for some
things that regulators would usu-
ally punish them for, like not per-
forming a thorough-enough back-
ground check on a borrower who
later turns out to be a criminal.
But they are not completely ex-
empt from having to look into
customers’ profiles, and one way
they can avoid having to do too

much extra paperwork is to lend
only to existing customers.
That barrier is causing prob-
lems for small businesses that
have not borrowed money re-
cently. It is an even bigger prob-
lem for minority-owned busi-
nesses, which struggle even in
good times against discrimina-
Another fear is that the pro-
gram will be overrun by funda-
mentally healthy businesses ea-
ger to have the government cover
up to two months of their payroll
costs. Borrowers do not have to
document a hardship like a sharp
sales drop; they simply have to af-
firm that “current economic un-
certainty” makes the aid neces-
sary to support their “ongoing op-
Despite the program’s chaotic
start, Mr. Steinour of Huntington
Bank said he hoped it would play a
vital role in salvaging tens of thou-
sands of businesses that would
otherwise collapse.
“This is an extraordinary pro-
gram, and to have it all put togeth-
er in a week was a phenomenal,
around-the-clock effort,” he said.


In a Scramble, Small Businesses Rush to Apply for U.S.-Backed Loans

From Page A

Melissa Perri was denied a loan from Bank of America on Friday despite already having a business account and a line of credit there.


Alan Rappeport and Nathaniel
Popper contributed reporting.

away in the $2 trillion coronavirus
stabilization bill is a provision that
allows Education Secretary Betsy
DeVos to seek congressional ap-
proval to waive parts of the fed-
eral special education law while
schools combat the coronavirus
How she might use that author-
ity scares parents like Jennifer
Gratzer, who lives in Seattle.
It took a 350-page complaint
and hours of work for Ms. Gratzer
to get the proper special education
services for her 10-year-old son, a
nonverbal third grader who has
epilepsy and a condition called
cortical visual impairment. He
has made progress with services
like occupational therapy, speech
therapy and a one-on-one aide, af-
forded to special-needs students
like him under the Individuals
with Disabilities Education Act.
But Ms. Gratzer fears that Ms. De-
Vos may relieve her son’s school
district of such obligations for the
foreseeable future.
“No one wants to do the hard
thing unless they’re forced to do
it,” Ms. Gratzer said, “and our kids
have always been the hard thing.”
With the closure of schools
across the country, parents like
Ms. Gratzer have found them-
selves in an educational crisis like
none seen since the disabilities
law passed in 1975. Today, it grants
nearly seven million students in-
dividualized instruction and a
vast array of educational support
and services.
Schools are scrambling to shift
classes online as more than 55 mil-
lion children stay at home. For
now, that has upended special ed-
ucation, which is administered
through meticulously devised
plans called Individualized Edu-
cation Programs, or I.E.P.s, which
require extensive services that
are not easily transferred to the
Students who qualify can have
moderate to severe disabilities
and require a range of support,
such as tutoring and behavioral
assistance, hands-on services like

physical and occupational ther-
apy, and specialized staff. Such
services are critical for school dis-
tricts to comply with IDEA’s man-
date that students with special
needs receive an education com-
parable to that of their peers.
The possibility that those obli-
gations could be waived has driv-
en a sharp wedge between school
administrators, parents and spe-
cial education teachers. Adminis-
trators and educators say without
the waivers they would be forced
to meet unrealistic expectations
and face costly lawsuits. Avoiding
those consequences could mean
that districts decide not to offer
any education at all to students in
the next two months.
“While districts are working on

solutions for kids with special
needs, they shouldn’t wait to
serve everyone else,” Michael J.
Petrilli, the president of the Thom-
as B. Fordham Institute, a conser-
vative research organization,
wrote on Twitter.
“The attitude that we need to
have is: Let’s do everything we
can, as fast as we can, for as many
kids as we can,” he later said.
Lee Ann Wentzel, the superin-
tendent of the Ridley School Dis-
trict in Pennsylvania, said her
staff had been reviewing thou-
sands of records, connecting with
hundreds families and finding cre-
ative ways to offer one-on-one
services like speech therapy
through platforms like Google
But, she conceded, “even with
accessibility devices, there are
some times when features will
come up short for some children.”
“We have to acknowledge the
fact that we’re not going to be 100
percent compliant, and not for not

trying,” she continued. “But we
decided to do what’s best for all
But parents and special educa-
tion advocates fear the waivers
could mark the beginning of the
end of student disability rights.
Ms. Gratzer said she did not ex-
pect the same level of services
that her son received in school. He
could not see let alone follow what
was happening on the screen dur-
ing a recent meeting over Zoom,
she said. But she said she hoped to
take advantage of a benefit under
the virus relief law that required
schools to make up for lost time.
“It’s easy to do what they want
and steamroll right over our kids,”
Ms. Gratzer said. “My fear is that
while parents like myself are try-
ing to survive, people like Betsy
DeVos will be out there pulling the
rug from underneath us.”
The stimulus bill provision gave
Ms. DeVos 30 days to submit rec-
ommendations for any waivers
from the law she believes are nec-
essary. Angela Morabito, an Edu-
cation Department spokeswom-
an, said the department was re-
viewing the congressional re-
quest, “and will respond as
“Secretary DeVos has been
clear from the beginning that she
is committed to ensuring all stu-
dents, including students with dis-
abilities, can continue their educa-
tions during this national emer-
gency,” Ms. Morabito said.
Civil rights organizations say
Ms. DeVos does not need to waive
provisions to meet that commit-
ment, and doing so could have un-
intended consequences.
“You’re taking a temporary dis-
advantage and making it perma-
nent because it will be hard to re-
coup that learning loss,” said Mir-
iam A. Rollin, the director of the
Education Civil Rights Alliance at
the National Center for Youth
Law. “It really is opening a whole
Pandora’s box.”
In a letter, the National Urban
League, The Education Trust and
other groups said waiver author-
ity for IDEA was “unnecessary.”
The AASA, The School Superin-

tendents Association, disagreed,
saying the right to request a
waiver from special education
mandates was vital when a shut-
down district was struggling to
meet the basic educational needs
of its students.
The organization has asked the
Education Department to con-
sider waivers from timelines for
evaluating students and for relief
from stringent rules for adjusting
a student’s individualized educa-
tion plans.
It also asked for flexibility from
rules that govern how schools
must respond to due process com-
plaints that parents and lawyers
file against districts for failing to
provide services. The organiza-
tion reported that lawyers had al-
ready filed complaints in at least
four states.
Gregory Molloy, the superin-
tendent of Morrisville-Eaton Cen-
tral School District in central New

York, said the threat of due
process complaints had loomed
over districts in his region. The
school district is reaching out to
the parents of special education
students to rewrite their individu-
alized plans.
But, he said, “how do you de-
liver a one-to-one aide?” If schools
did not, “that’s an easy due
process complaint,” he said.
Mr. Molloy said his small, rural
school district was still “reeling
from the pain that was inflicted”
by a case two years ago, when it
had to pay between $20,000 to
$30,000 in legal fees alone. The
damage to the morale of staff ac-
cused of failing children was irrep-
arable, he said.
He said he hoped that in addi-
tion to waiving timelines and
other rules, the Education Depart-
ment would consider holding
schools harmless against any due
process complaints.

“What happens four months
from now, when we’re back in
school and back into a routine, and
lawyers are hungry?” Mr. Molloy
said. “That empathy that exists
for teachers right now, that could
Susan Lee said her 23-year ca-
reer as a special educator made
her a better mother when her
daughter began to lose skills like
walking and talking by age 3. Her
daughter, Alyssa, made her a bet-
ter teacher, she said, giving her
the skills to unlock the potential of
students living in a body that does
not work for them.
Next week, when Ms. Lee’s
school district in Alabama transi-
tions to online instruction, both of
her roles will be tested.
She will reconnect with 21 sec-
ond and third graders, whose fed-
erally mandated special educa-
tion plans call for her to provide
seven to eight hours of individual-
ized instruction and a range of be-
havioral support. But Ms. Lee will
also have to juggle instruction for
Alyssa, now 12, who cannot hold or
manipulate a mobile device be-
cause of Rett Syndrome, a rare ge-
netic disorder that has left her
completely dependent.
“As much as I wish I could pro-
vide every ounce of instruction to
my students that is spelled out in
their I.E.P.s, it is just not possible,”
Ms. Lee said. “How am I able to
teach behavioral skills when I
can’t be there physically to re-
inforce it? If I’m teaching a class
online and she has a seizure,
where does that leave me?”
Ms. Lee said she also had reser-
vations about the potential
waivers and hoped that schools
did not write off special education
students for the rest of the year.
But she also said she hoped the
waiver provision would help
schools and parents reach a mid-
dle ground.
“When you have a child with a
disability, we’re told it’s OK to
mourn the child we thought we
had, and it’s also our opportunity
to dream new dreams,” Ms. Lee
said. “I think we need to apply that
to this situation. It’s OK to mourn
the school year that we thought
we were going to have.”


Susan Lee, a special educator,
and her 12-year-old daughter,
Alyssa, will be tested as their
school district in Alabama
moves to online instruction.


Parents Fear Special Education Cuts

As DeVos Weighs Waiving Provisions


Students cannot get

hands-on services as

classes move online.

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