[Code of Federal Regulations]

[Title 34, Volume 3]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 34CFR628.45]



[Page 279]

 

                           TITLE 34--EDUCATION

 

 CHAPTER VI--OFFICE OF POSTSECONDARY EDUCATION, DEPARTMENT OF EDUCATION

 

PART 628_ENDOWMENT CHALLENGE GRANT PROGRAM--Table of Contents

 

   Subpart E_What Conditions Must a Grantee Meet Under the Endowment 

                        Challenge Grant Program?

 

Sec. 628.45  How much endowment fund income may a grantee use and for 

what purposes?



    (a) During the endowment challenge grant period, a grantee--

    (1) May withdraw and spend up to 50 percent of the total aggregate 

endowment fund income earned prior to the date of expenditure;

    (2) May spend the endowment fund income for--

    (i) Costs necessary to operate the institution, including general 

operating and maintenance costs;

    (ii) Costs to administer and manage the endowment fund; and

    (iii) Costs associated with buying and selling securities, such as 

stockbroker commissions and fees to ``load'' mutual funds;

    (3) May not use endowment fund income for--

    (i) A school or department of divinity or any religious worship or 

sectarian activity;

    (ii) An activity that is inconsistent with a State plan for 

desegregation applicable to the grantee; or

    (iii) An activity that is inconsistent with a State plan applicable 

to the grantee; and

    (4) May not withdraw or spend the remaining 50 percent of the 

endowment fund income.

    (b) Notwithstanding paragraph (a)(1) of this section, the Secretary 

may permit a grantee that requests to spend more than 50 percent of the 

total aggregate endowment fund income to do so if the grantee 

demonstrates that the expenditure is necessary because of--

    (1) A financial emergency such as a pending insolvency or temporary 

liquidity problem;

    (2) A situation threatening the existence of the institution such as 

destruction due to a natural disaster or arson; or

    (3) Another unusual occurrence or demanding circumstance, such as a 

judgment against the institution for which the institution would be 

liable.

    (c) If, during the grant period, a grantee spends more endowment 

fund income or uses it for purposes other than permitted under 

paragraphs (a) or (b) of this section, it shall repay to the Secretary 

an amount equal to 50 percent of the amount improperly spent.

    (d) At the end of the grant period, the institution may use all of 

the endowment fund income for any educational purpose.



(Authority: 20 U.S.C. 1065)



[49 FR 28521, July 21, 1984, as amended at 52 FR 11258, Apr. 8, 1987; 58 

FR 11163, Feb. 23, 1993]