34 CFR §628.45

1. (a)During the endowment challenge grant period, a grantee—
   1. (1)May withdraw and spend up to 50 percent of the total aggregate endowment fund income earned prior to the date of expenditure;
   2. (2)May spend the endowment fund income for—
      1. (i)Costs necessary to operate the institution, including general operating and maintenance costs;
      2. (ii)Costs to administer and manage the endowment fund; and
      3. (iii)Costs associated with buying and selling securities, such as stockbroker commissions and fees to “load” mutual funds;
   3. (3)May not use endowment fund income for—
      1. (i)A school or department of divinity or any religious worship or sectarian activity;
      2. (ii)An activity that is inconsistent with a State plan for desegregation applicable to the grantee; or
      3. (iii)An activity that is inconsistent with a State plan applicable to the grantee; and
   4. (4)May not withdraw or spend the remaining 50 percent of the endowment fund income.
2. (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. (1)A financial emergency such as a pending insolvency or temporary liquidity problem;
   2. (2)A situation threatening the existence of the institution such as destruction due to a natural disaster or arson; or
   3. (3)Another unusual occurrence or demanding circumstance, such as a judgment against the institution for which the institution would be liable.
3. (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.
4. (d)At the end of the grant period, the institution may use all of the endowment fund income for any educational purpose.