Gordon College, a Christian school in Wenham, Massachusetts, could be required to pay back more than $7 million of COVID-19 relief funds. The school contested that its request for loan forgiveness was denied because of religious discrimination.

Gordon College describes itself on its sitio web as “New England’s top Christian college,” with around 1,300 students on the North Shore of Boston.

In July, a federal judge denied the college’s arguments that it was eligible for loan forgiveness based on First Amendment religious liberty protections and the Religious Freedom Restoration Act, according to registros de la corte. The judge said the school had no evidence to back up its allegations.

Gordon requested the Paycheck Protection Program (PPP) loan in early April 2020 to help navigate the pandemic and its financial impact on the organization, according to a demanda judicial filed by the school.

The “unprecedented shutdowns of the U.S. economy and educational systems” during the start of the pandemic “created serious practical, financial, and existential issues for colleges,” the lawsuit said. 

The government gave out more than $800 billion as part of the Coronavirus Aid, Relief, and Economic Security Act passed by Congress in 2020, according to the Pew Charitable Trusts.

At issue is the number of employees Gordon has. Organizations with less than 500 employees are eligible for loan forgiveness under the Coronavirus Aid, Relief, and Economic Security Act, the court records stated.

When applying for the PPP loan through the US Small Business Administration (SBA) in April 2020, Gordon counted its employee total based on units of time they worked. So, a part-time employee was counted as a fraction of a full-time employee.

According to this calculation, Gordon reported 496 employees. However, Gordon’s total number of part-time and full-time employees at the time was 639.

By the end of April, the SBA said in a statement that the number of employees should be determined by a head count, numbering full- and part-time employees equally. This meant Gordon would no longer be eligible for loan forgiveness.

By this time, Gordon had already received its loan from Citizens Bank, a PPP partner, and was using the money to pay its employees.

Gordon also said it was unaware of the SBA rule until November 2021. That’s when Citizens Bank asked Gordon for an updated employment count without giving a reason as to why they needed it. Gordon told the bank it had 639 employees.

In April 2022, the SBA notified Gordon that its application for loan forgiveness was denied because the college had more than 500 employees.

Lawyers for the school allege that the loan’s form indicated units of time worked was an acceptable method for counting employees. “There was widespread confusion about what method to determine the number of employees should be used,” the lawsuit said.

Gordon has unsuccessfully appealed the denial multiple times. In March 2023, the college filed a lawsuit against SBA, claiming the government organization had engaged in religious discrimination.

In its lawsuit, the school’s lawyers said the SBA “discriminated against (Gordon), an evangelical Christian college with religiously and socially conservative views.”

The lawyers claimed 25 other schools, which counted employees the same way as Gordon did, had their loans of similar amounts forgiven.

They added that the “SBA Court refused to even consider an exemption or other relief from a cramped and unconstitutional interpretation of the ‘500 employee’ threshold.”

Gordon’s lawyers also contended that First Amendment religious liberty protections and the Religious Freedom Restoration Act permit the college’s method of counting employees.

Federal Judge Beryl A. Howell disagreed with this argument, escribiendo, “Plaintiff alleges no facts connecting its number of employees to any religious practice.” He added, “Plaintiff fails to identify any ‘exercise of religion’ that has been burdened, and thus plaintiff’s claims can be dismissed on this basis alone.”

Howell said that many of the 25 universities Gordon listed were in fact Christian schools. Gordon’s lawsuit mentioned Wheaton College, Trevecca Nazarene University, Drew University, and St. Mary’s College Notre Dame.

Howell said there wasn’t any evidence showing how the method of counting employees tied to religion or impacted the school’s religious practices.

He stated, “No allegation is made that the 500-employee cap or SBA’s methods for counting employees were enacted to target or single out any religious conduct or institutions. Nor that the cap or employee-counting methodology employed have an adverse impact on religion.”

While lawyers argued 11 reasons why Gordon’s loans should be forgiven, the judge’s opinion has now dismissed eight of these.

Gordon can either appeal the opinion or wait until the case moves forward in Washington D.C.’s District Court on the remaining reasons. 

Gordon can still argue that the decision to deny the loan was a legal error, “made in excess of SBA’s statutory authority,” and that it was in violation of the Fourteenth Amendment’s guarantee of due process.

Freelance journalist Liz Lykins escribe for WORLD Magazine, Christianity Today, Ministry Watch, and other publications.