Hiram College taps most of its endowment to cover budget shortfall

Hiram College in Ohio, confronting large budget deficits, has borrowed more than $47 million from its $56 million endowment, including funds that donors had designated for particular uses. The school is working with the state attorney-general’s office on a repayment schedule and has begun notifying contributors both in writing and through personal meetings. Former president David Haney, who learned of the loans after assuming office, described the move as a precarious gamble that many small institutions feel compelled to make amid falling student enrollment.

Data from Perspective Data Science show that about 200 private colleges tapped restricted endowment assets in 2025, a rise from roughly 130 in 2021, while others are increasing annual draw rates beyond the traditionally sustainable 5 percent. Experts compare the practice to borrowing from a retirement account, noting risks such as credit-rating downgrades and erosion of donor confidence. Some schools, like Avila University, have successfully used endowment withdrawals to stabilize finances, but several institutions that have done so, including Martin University and Notre Dame College, have ultimately closed. Hiram hopes to avoid that fate by cutting low-enrollment majors, boosting fundraising, and repaying the loans, while its interim president James Malz leads the turnaround effort.