---
kind: "section"
citation: "34 C.F.R. § 628.45"
title: "34"
number: "628.45"
heading: "How much endowment fund income may a grantee use and for what purposes?"
url: "https://uscodex.org/cfr/34/628.45"
---

# §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)](#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)](#a) or [(b)](#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.

## Notes

### Amendments

[49 FR 28521, July 21, 1984, as amended at 52 FR 11258, Apr. 8, 1987; 58 FR 11163, Feb. 23, 1993]

### Authority

Authority: 20 U.S.C. 1065, unless otherwise noted.

### Source

Source: 49 FR 28521, July 21, 1984, unless otherwise noted.

### Amendments

[49 FR 28521, July 21, 1984, as amended at 52 FR 11258, Apr. 8, 1987; 58 FR 11163, Feb. 23, 1993]