MAY 1, 2025 | NEWS | By Seth Jahraus
The Trump administration has put many American universities in its regulatory crosshairs. So far, Colorado College hasn’t been one of them.
In an attempt to crack down on the bigger names in higher education, President Donald Trump has threatened to remove federal funding from several institutions, citing their failure to remove diversity, equity and inclusion (DEI) programs or properly handle on-campus anti-Semitism.
Of the top-flight schools that have been singled out as targets for funding cuts, Harvard has had the most at stake and has so far put up the most resistance. Columbia, in stark contrast, has accommodated many of the administration’s requests in an attempt to dodge the large cuts.
The government has released additional lists which include other colleges currently under investigation by the Department of Education. Despite Colorado College’s adherence to its DEI policies alongside its history of campus protests and subsequent federal complaints, CC has yet to appear on any of said lists.
That hasn’t stopped CC administrators from taking cautionary steps to prepare for any funding deficits that may come the college’s way.
“I think about that every day,” said Chief Financial Officer Lori Seager when asked what the college’s next steps would be if the budget came under fire.
Last year, Colorado College received $8.4 million in federal funds which makes up approximately 3.4% of the college’s annual revenue. About $380,000 of that came from the National Science Foundation and went to various faculty research programs. The remaining $8 million went to financial aid resources including Pell Grants, work-studies and primarily, federal loans.
But according to Interim President Manya Whitaker, losing federal funding ranks low on the list of CC’s financial worries.
“It’s not a ton of money, but we are modeling, ‘What if?’” said Whitaker.
What’s currently at stake is the comparatively small amount of research funding the school receives. (CC’s recent designation as a Research College and University by the Carnegie Foundation will not have any immediate impact on funding.) However, the Trump administration has recently made moves to limit the amount of Pell Grants and federal loans that students may receive.
If the government were to cut all $8 million of federal funding that CC receives, the primary deficit would be the $4.7 million which goes to federal loans. A possible ramification according to Seager would be students needing to find private firms to support their loan needs.
“We would have to really try to help our students and families find those lending companies,” said Seager. “We’re strategizing around how we can offer supporting information for them to know what’s available.”
A significantly more pressing issue for the college, according to Seager and Whitaker, is the proposed endowment tax increase, called the Endowment Tax Fairness Act, that is currently being considered by Congress. Right now, any school with an endowment value greater than $500,000 per student is subject to a 1.4% tax on its net investment income. The proposal would raise that tax to 21%.
Colorado College has around $491,000 per student in its endowment right now, putting it right on the cusp of the tax bracket. With the endowment being so close to exceeding the threshold, CC’s Board and administration have been preparing to face the 1.4% tax, which would take about $350,000 to $400,000 out of the school’s endowment earnings. With the proposed increase, CC could be giving up anywhere between $5 million to $7 million annually.
Colorado College 2023-24 operating revenues distribution by last year’s financial report
The college’s endowment payouts contributed $42.6 million to operating expenses last year including $15.8 million to financial aid. That makes up 37% of the school’s financial aid distributions. But increased taxes on the investment revenue wouldn’t directly affect these numbers, at least not immediately. Instead, it would reduce the college’s earnings over time.
Colorado College endowment distributions from 2014 and 2024 by last year’s financial report
“Does that mean cuts to programs? Probably not, but it does mean much slower growth,” said Seager. “You would lose your purchasing power in the endowments. So it could slowly whittle things away.”
Colorado College and several other universities are worried about the long-term growth of their investments, so much so that a coalition of smaller schools, including CC, has come together to send lobbyists and representatives to Capitol Hill to explain what endowments are and why chipping away at them could have major consequences.
The question becomes, why are institutions so set on protecting their endowment growth? As higher ed finance expert and CU Denver Professor Todd Ely puts it, a consistently growing endowment provides a sort of security blanket.
“The bigger the endowment, the more guaranteed income you have every year that you don’t have to worry about getting through new fundraising or through raising tuition,” said Ely.
A large endowment also stands as a mark of prestige. The more value an institution has, the more acclaim it has to its name and the more likely it is to garner donations.
“It kind of legitimizes the organization. Alumni and benefactors actually want to give to a winner, right?” said Ely. “It does bolster the reputation.”
Colorado College may be particularly interested in preserving its endowment growth because of its reliance on endowment funds for its operations. About 23% of CC’s operating expenses were covered by endowment earnings. Endowment earnings typically support about 15.3% of college operation costs nationwide, but each school varies based on their specific needs and funding priorities.
The school is at a particularly interesting crossroads regarding its placement just outside of the endowment tax category. Instead of continuing to grow the endowment, the college could maintain a more controlled endowment management strategy which would keep the value right at around $990 million. CC could also take more students in to offset the per student margins they are facing, especially after a low enrollment year.
“You can change the denominator as well as the numerator in that kind of formula,” said Ely.
The college’s choice to lobby in Washington D.C. seems to indicate that it doesn’t have plans to slow its endowment growth or willingly raise its acceptance rate. There is another proposed bill going through Congress called the Endowment Accountability Act which could lower the threshold to $200,000 per student which CC could also be anticipating.
As far as Colorado College’s next steps in navigating the higher education political climate, Whitaker has made it clear that despite Trump’s attack on DEI policies, many policies that CC actively supports, the college will not be making concessions. When asked if CC has altered any of its programs or changed the wording on any of its DEI website tabs in hopes of flying under the radar of the Trump administration, Whitaker gave a resounding “no.”
“All we’re going to end up doing is wasting resources, time, energy, money, all of it,” said Whitaker. “On top of that, we’re not going to undo our values.”
Whitaker emphasized the wishy-washiness of the Trump administration, pointing out how recently it has already walked back many of its student visa restrictions. Whitaker also recently signed on to a letter which emphasized the importance of academic freedom in America. When CC first signed on to the letter, approximately 150 institutions had as well. Now that number is well above 500.
With minimal federal funding on the line whilst in the company of many other universities, Colorado College may avoid a significant funding decrease that would come from a targeted Trump attack. But as many institutions are putting up a stronger front against the Trump administration, CC is confronting what it can do in the battle against higher education.
Whitaker believes it has provided an opportunity to further the college’s relationships with surrounding schools.
“It’s lots of combinations of collective organizing that we as an institution have never participated in before,” said Whitaker.
Alongside the coalition of small schools CC is partnering with for their lobbying efforts, the college has also been in contact with other private institutions in Colorado like the University of Denver and Regis University. Whitaker also emphasized CC’s outreach with other Colorado Springs schools like the University of Colorado, Colorado Springs and Pikes Peak State College.