[Code of Federal Regulations]
[Title 34, Volume 3]
[Revised as of July 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 34CFR628.45]

[Page 293-294]
 
                           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.

[[Page 294]]

    (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]