Hiram College pulled 84% of its endowment into the operating budget

Start with 325, because that is the number that makes a repayment plan hard: Hiram's recent audit counted 325 separate restricted endowment funds ^[6], and $56 million spread evenly across 325 of them averages about $172,000 each, lower in practice because some part of any endowment carries no donor conditions at all ^[7]. Restitution against that structure is not one cheque. It is several hundred small reconstructions, each with a named purpose sitting behind it, which is why the college is working through the state attorney general's office ^[4] and telling donors about the draw both in writing and face to face ^[5].

Subtract and you get $9 million nominally left ^[9], but the source does not date the $56 million figure against the withdrawals ^[1], so I am not going to tell you what is standing.

Avila University ran the same trade in the opposite order, asking a court in 2023 to loosen restrictions on 97 funds worth $6.4 million before the money moved ^[10], roughly $66,000 a fund ^[11]. Hiram's draw is about 7.3 times Avila's entire petition ^[12]. Avila's chief operating officer says the school is on better footing and intends to replenish ^[13], though the enrollment gains underneath that came from international recruiting, which the Trump administration's visa limits have since hit ^[14], and his own framing is that this sat far down the list of things Avila tried ^[15].

Analysts reach for the 401(k) loan as the comparison, with a credit rating downgrade as the long-term risk ^[19]. That undersells it, or rather it misses the more interesting part: a 401(k) loan does not create a state law enforcement counterparty ^[4], and it has one beneficiary rather than 325 funds' worth ^[6].

This is probably harsher than the individual cases deserve, but the pattern reads as a sector financing operating deficits out of permanent capital: nearly 200 private colleges borrowed from restricted funds in 2025 against about 130 in 2021, on Perspective Data Science's estimates, which is roughly 70 more institutions, or 54 percent, in four years ^[8][16]. The counter-thesis has a decent advocate in Cambridge Associates' Tracy Filosa, who says some schools have nowhere else to turn and that an endowment, while not a rainy day fund, is in one sense there to carry an institution through a rainy day ^[18]. Against her, Fitch's Emily Wadhwani calls the move a real red flag to outsiders ^[20], and both Martin University and Notre Dame College drew down and closed anyway ^[21].

What settles it is repayment, and the resource question underneath repayment: every dollar Hiram schedules back into those funds is a dollar not spent on the enrollment decline that opened the hole ^[22], which is close to the trade David Haney, president from 2020 to 2023, was describing when he said smaller colleges keep assuming things will turn around if they build the athletic facility, and mostly find they do not ^[17]. Schools with endowments north of $5 billion, about 89 times Hiram's corpus, never face that allocation ^[22][23]. If a meaningful share of 2025's borrowers show restored funds within a couple of years, it was bridge financing and this read was wrong.