Struggling colleges are raiding restricted “endowments to pay the bills,” reports The Wall Street Journal:
When Natalie Strouse’s husband of 20 years died of cancer, she honored his memory by creating a scholarship in his name at the college where she taught accounting. Each year, she helped select a student to receive a few thousand dollars at Notre Dame College, a small Catholic school outside Cleveland. But in 2024, the college closed. Strouse wanted to re-establish the scholarship at another institution. She asked Notre Dame for the $30,000 endowment, which under the terms of the gift could only be used to support the scholarship.
Not possible, she said an administrator informed her. The money was gone. “She told me they used it to pay the bills,” Strouse said. “I consider it theft.”
Ohio’s attorney general last year filed a complaint against 14 Notre Dame College officials, over how they improperly used more than $2 million of restricted endowment funds for purposes never intended by donors.
As The Journal notes, “Higher education is in real financial trouble…College leaders are cutting programs, laying off faculty—and digging into endowments to pay operating expenses….schools are covering day-to-day bills with funds that donors gifted for other purposes, without the donors’ knowledge or consent.” They are fleecing “thousands of philanthropists who have donated billions of dollars to colleges and universities across generations.” “Nearly 200 private colleges borrowed from restricted endowments in 2025, up from 131 in 2021.” Schools used most of the money for operating expenses.
